2021
ANNUAL REPORT
Intermap Technologies Corporation
Corporate Information
OFFICES
Canadian Corporate Office
Intermap Technologies Corp.
840–6th Avenue SW
Suite 200
Calgary, AB T2P 3E5
Canada
Phone: (403) 266-0900
Fax: (403) 265-0499
Denver Worldwide Headquarters
Intermap Technologies, Inc.
8310 South Valley Highway
Suite 240
Englewood, CO 80112-5809
United States
Phone: (303) 708-0955
Fax: (303) 708-0952
BOARD OF DIRECTORS
Partick A. Blott
Chairman and CEO
New York, New York, USA
Philippe Frappier
Director
Toronto, Ontario, Canada
TRANSFER AGENT
Computershare Trust
Company of Canada
600, 530 - 8th Avenue S.W.
Calgary, Alberta T2P 3S8
Canada
AUDITORS
KPMG LLP
150 Elgin Street
Suite 1800
Ottawa, ON K2P 2P8
Canada
P.T. ExsaMap Asia
Wisma Anugraha - 2nd Floor
Jl. Taman Kemang No.32B
Jakarta, Selatan 12510
Indonesia
Phone: +62 021 719 3808
Fax: +62 021 719 3818
Intermap Technologies s.r.o.
Zelený pruh 95/97
140 00 Prague 4
Czech Republic
Phone: +420 261 341 411
Fax +420 261 341 414
Jordan Tongalson
Director
New York, New York, USA
John Hild
Director
Ellicott City, Maryland, USA
STOCK EXCHANGE
INTERMAP STOCK IS LISTED
ON THE TORONTO STOCK
EXCHANGE UNDER THE
SYMBOL “IMP”
AND THE OTCQX® BEST MARKET UNDER THE
SYMBOL “ITMSF”
OFFICERS AND KEY PERSONNEL
Patrick A. Blott
Chairman and CEO
Jennifer S. Bakken
Exceutive Vice President and CFO
Management’s Discussion and Analysis
1
For the year ended December 31, 2021
For purposes of this discussion, “Intermap®” or the “Company” refers to Intermap Technologies® Corporation
and its subsidiaries.
This management’s discussion and analysis (MD&A) is provided as of March 31, 2022 and should be read
together with the Company’s audited Consolidated Financial Statements and the accompanying notes
for the years ended December 31, 2021 and 2020. The results reported herein have been prepared in
accordance with International Financial Reporting Standards (IFRS) and, unless otherwise noted, are
expressed in United States dollars.
The audited Consolidated Financial Statements have been prepared on a going concern basis in accordance
with IFRS. The going concern basis of presentation assumes the Company will continue to operate for the
foreseeable future and will be able to realize its assets and discharge its liabilities in the normal course of
business.
The Consolidated Financial Statements do not reflect adjustments that would be necessary if the going
concern assumption were not appropriate. If the going concern basis were not appropriate for these
financial statements, then adjustments would be necessary to the carrying amounts of assets and liabilities,
the reported expenses and the classifications used in the statements of financial position.
Additional information relating to the Company, including the Company’s AIF, can be found on the
Company’s website at www.intermap.com and on SEDAR at www.sedar.com.
NON-IFRS MEASURES
This MD&A makes reference to certain non-IFRS measures such “EBITDA” and “Adjusted EBITDA”. These
non-IFRS measures are not recognized, defined or standardized measures under IFRS. The Company’s
definition of EBITDA and Adjusted EBITDA will likely differ from that used by other companies and therefore
comparability may be limited. EBITDA and Adjusted EBITDA should not be considered a substitute for or
in isolation from measures prepared in accordance with IFRS. These non-IFRS measures should be read in
conjunction with the Company’s audited Consolidated Financial Statements and the accompanying notes
for the years ended December 31, 2021 and 2020. Readers should not place undue reliance on non-IFRS
measures and should instead view them in conjunction with the most comparable IFRS financial measures.
See the reconciliation of EBITDA and Adjusted EBITDA to the most comparable IFRS financial measure in the
Reconciliation of Non-IFRS Measures section of this MD&A.
FORWARD-LOOKING STATEMENTS
In the interest of providing the shareholders and potential investors of Intermap Technologies® Corporation
(“Intermap” or the “Company”) with information about the Company and its subsidiaries, including
management’s assessment of Intermap’s and its subsidiaries’ future plans, operations and financing
alternatives, certain statements and information provided in this MD&A constitute forward-looking
statements or information (collectively, “forward-looking statements”). Forward-looking statements are
typically identified by words such as “may”, “will”, “should”, “could”, “anticipate”, “expect”, “project”, “estimate”,
“forecast”, “plan”, “intend”, “target”, “believe”, and similar expressions suggesting future outcomes, and
includes statements that actions, events, or conditions “may,” “would,” “could,” or “will” be taken or occur in
the future. These forward-looking statements may be based on assumptions that the Company believes to
be reasonable based on the information available on the date such statements are made, such statements
are not guarantees of future performance and readers are cautioned against placing undue reliance on
forward-looking statements. By their nature, these statements involve a variety of assumptions, known and
unknown risks and uncertainties, and other factors which may cause actual results, levels of activity, and
2
achievements to differ materially from those expressed or implied by such statements. The forward-looking
information contained in this MD&A is based on certain assumptions and analysis by management of the
Company in light of its experience and perception of historical trends, current conditions and expected
future development and other factors that it believes are appropriate.
Forward-looking information and statements in this MD&A include, but are not limited to the following:
•
•
•
•
•
the Company will begin to recognize the balance of the acquisition services contract in 2022;
the Company remains well-positioned to withstand COVID-19-related slowdowns and remains
confident in the pipeline;
continued revenue generation from future updates related to two new government program awards in
South America and the US;
all trade receivable balances are highly likely to be paid in full by the customer;
the factors noted under “Liquidity and Capital Resources” may be exacerbated by the ongoing
COVID-19 pandemic and in the aggregate indicate there are material uncertainties which may cast
significant doubt about the Company’s ability to continue as a going concern;
• management’s belief that an improved capital structure, including the Q3 2021 private placement
raising gross proceeds of $2.5 million will provide much needed investment in revenue growth; and
•
failure to achieve certain requirements could have a material adverse effect on the Company’s financial
condition and/or results of operations.
The material factors and assumptions used to develop the forward-looking statements herein include,
but are not limited to, the following: (i) there will be adequate liquidity available to the Company to carry
out its operations; (ii) payments on material contracts will occur within a reasonable period of time after
contract completion; (iii) the continued sales success of Intermap’s products and services; (iv) the continued
success of business development activities; (v) there will be no significant delays in the development
and commercialization of the Company’s products; (vi) the Company will continue to maintain sufficient
and effective production and software development capabilities to compete on the attributes and cost
of its products; (vii) there will be no significant reduction in the availability of qualified and cost-effective
human resources; (viii) the continued existence and productivity of subsidiary operations; (ix) demand for
geospatial related products and services will continue to grow in the foreseeable future; (x) there will be no
significant barriers to the integration of the Company’s products and services into customers’ applications;
(xi) the Company will be able to maintain compliance with applicable contractual and regulatory
obligations and requirements, (xii) superior technologies/products do not develop that would render
the Company’s current product offerings obsolete, and (xiii) expected impact of the novel coronavirus
(COVID-19) pandemic on the Company’s future operations and performance.
Intermap’s forward-looking statements are subject to risks and uncertainties pertaining to, among
other things, cash available to fund operations, availability of capital, revenue fluctuations, nature of
government contracts, economic conditions, loss of key customers, retention and availability of executive
talent, competing technologies, continued listing of its common shares on the Toronto Stock Exchange or
equivalent exchange, common share price volatility, loss of proprietary information, software functionality,
internet and system infrastructure functionality, information technology security, breakdown of strategic
alliances, and international and political considerations, including but not limited to those risks and
uncertainties discussed under the heading “Risk Factors” in the annual MD&A and the Company’s other
filings with securities regulators. Any one or more of the foregoing factors may be exacerbated by the
ongoing COVID-19 pandemic and may have a significantly more severe impact on the Company’s business,
results of operations and financial condition than in the absence of such pandemic.
We are closely monitoring the ongoing and future potential effects of the COVID-19 pandemic on our
2021 Annual Report | Management’s Discussion and Analysis 3
operations and financial performance; however, the impacts of the pandemic continue to develop and
evolve, and their full extent is difficult to predict at this time. We are conducting business with substantial
modifications to employee work locations and travel, along with substantially modified interactions with
customers. Proceeds from the government assistance programs in the United States and Canada have
helped the Company to retain critical talent during this challenging time. We will continue to monitor the
impact of the COVID-19 pandemic on all aspects of our business, including customer purchasing decisions,
and may take further actions that alter our business operations. The impact of the COVID-19 pandemic on
our operational and financial performance will depend on certain developments, including the duration
and spread of the virus, the further impact on our customers and our sales cycles, the impact on business
development and marketing activities, and further delays in customer projects and activities, all of which
are uncertain and cannot be predicted. Due to our subscription-based business model for commercial
customers and long sales cycle for government customers, the impact may not be fully reflected in our
operations until future periods.
The impact of any one risk, uncertainty, or factor on a particular forward-looking statement is not
determinable with certainty as these are interdependent, and the Company’s future course of action
depends on Management’s assessment of all information available at the relevant time. Except to the extent
required by law, the Company assumes no obligation to publicly update or revise any forward-looking
statements made in this MD&A, whether as a result of new information, future events, or otherwise. All
subsequent forward-looking statements, whether written or oral, attributable to the Company or persons
acting on the Company’s behalf, are expressly qualified in their entirety by these cautionary statements.
BUSINESS OVERVIEW
Intermap is a global geospatial intelligence company, creating a wide variety of geospatial solutions and
analytics for its customers. Intermap is a premier worldwide provider of geospatial data solutions.
Intermap currently generates revenue from three primary business activities, composed of (i) data
acquisition and collection, using proprietary radar sensor technologies; (ii) value-added data products
and services, which leverage the Company’s proprietary NEXTMap® database, together with proprietary
software and fusion technologies; and (iii) commercial applications and solutions, including a webstore and
software sales targeting selected industry verticals that rely on accurate high resolution elevation data.
These geospatial solutions are used in a wide range of applications including, but not limited to, location-
based information, risk assessment, geographic information systems (GIS), engineering, utilities, global
positioning systems (GPS) maps, oil and gas, renewable energy, hydrology, environmental planning, land
management, wireless communications, transportation, advertising, and 3D visualization.
Intermap has the ability to create its own digital 3D geospatial data using its proprietary multi-frequency
radar mounted in Learjet aircraft. Intermap’s radar-based technology allows it to collect data at any time
of the day, including under conditions such as cloud and tree cover, or darkness, which are conditions that
limit most competitive technologies. The Company’s proprietary radar also enables data to be collected
over larger areas, at higher collection speeds, and at accuracy levels that are difficult to achieve with
competitive technologies.
In addition to data collection, the Company is a world leader in data fusion, analytics, and orthorectification,
and has decades of experience aggregating data derived from a number of different sensor technologies
and data sources. The Company processes raw digital elevation and image data from its own and other
sources to create three high resolution geospatial datasets that provide a ground-true foundation layer
upon which accurate value-added products and services can be developed. The three high resolution data
sets include digital surface models (DSM), digital terrain models (DTM), and orthorectified radar images
(ORI). These datasets are further augmented with additional elevation and resolution data layers and served
2021 Annual Report | Management’s Discussion and Analysis 4
to customers by web service to create other value-added products, such as viewsheds, line of sight maps,
and orthorectified mosaic tiles.
Unlike many geospatial companies, because of its unique acquisition and processing capability, Intermap
retains exclusive ownership of its high resolution NEXTMap® database, which covers the entire globe.
Intermap’s NEXTMap database, together with third party data and our in-house analytics team, provide a
variety of applications and geospatial solutions for its customers. The NEXTMap database contains a fusion
of proprietary multi-frequency radar imagery and data, including unique Interferometric Synthetic Aperture
Radar (IFSAR)-derived data, proprietary data models, and purchased third-party data, collected from
multiple commodity sensor technologies, such as light detection and ranging (LiDAR), photogrammetry,
satellite, and other available sources. The NEXTMap database also includes proprietary information
developed by our analytical teams such as 3D city models, census data, real-time traffic, 3D road vectors,
outdoor advertising assets, weather related hazards, points of interest, cellular towers, flood models and
wildfire models.
The Company generates revenue by licensing its geospatial products using its proprietary data, analytics,
and applications for specific industries.
2021 Annual Report | Management’s Discussion and Analysis 5
FINANCIAL INFORMATION
The following table sets forth selected financial information for the periods indicated.
Selected Annual Information
U.S. $ millions, except per share data
Revenue:
Acquisition services
Value-added data
Software and solutions
Total revenue
Operating loss
Financing costs
Net (loss) income
EPS basic
EPS diluted
Adjusted EBITDA(1)
Assets:
2021
2020
2019
$
1.4
1.7
2.7
$
1.4
0.9
2.4
$
6.9
0.8
2.4
$
5.8
$
4.7
$
10.1
$
(5.5)
$
(5.1)
$
(3.0)
$
(0.1)
$
(1.3)
$
(2.9)
$
(3.4)
$
26.5
$
(4.9)
$
(0.12)
$
1.35
$
(0.28)
$
(0.12)
$
1.29
$
(0.28)
$
(2.2)
$
(2.7)
$
(1.0)
Cash, amounts receivable, unbilled revenue
$
1.0
$
2.4
$
2.4
Total assets
Liabilities:
$
7.4
$
7.6
$
7.8
Long-term liabilities (including lease obligations)
$
1.0
$
1.2
$
0.3
Total liabilities
$
6.6
$
6.2
$
37.2
(1)Adjusted EBITDA is a non-IFRS measure. See “Reconciliation of Non-IFRS Measures” below.
Revenue
Year-to-date Revenue
On a year-to-date basis, consolidated revenue for the year ended December 31, 2021 increased to $5.8
million, compared to $4.7 million for 2020. The increase was expected, given the recovery after the
disruption resulting from the COVID-19 pandemic. The Company remains well-positioned to withstand the
slowdown that began in 2019 and remains confident in the pipeline. Approximately 73% of consolidated
revenue was generated outside the United States, compared to 71% for 2020.
Acquisition Services
Acquisition services revenue was $1.4 million for both years ended December 31, 2021 and 2020. The
Company experienced significant delays in government contracting during 2020 and 2021 due to the
impact of uncertainty surrounding the COVID-19 pandemic.
During the fourth quarter of 2021, the Company commenced operations on a continuing strategic data
infrastructure contract for the government of Malaysia. Following initial contracting delays during the third
quarter of 2021, the program was further delayed after Intermap deployment by quarantine measures
implemented by the government in response to the Omicron COVID-19 variant, which extended project
milestones, revenue recognition, billings, and collections into 2022 that were originally planned and
budgeted to occur in December 2021. As a result, many of the larger project costs, including purchased
services, payroll, deployment, and mobilization expenses occurred in November and December of 2021,
well in advance of the associated milestones, billings, collections, and revenue that were extended into
2022. These timing effects, which resulted from the government’s response to COVID-19, caused a short-
2021 Annual Report | Management’s Discussion and Analysis
6
term reduction in the Company’s 2021 operating cash flow in the fourth quarter of 2021.
Value-added Data
Value-added data revenue increased to $1.7 million for the year ended December 31, 2021 as compared to
$0.9 million for 2020. The increase is mostly due to two new government program awards in South America
and the US, which will continue to generate revenue from future updates.
Software and Solutions
Software and solutions revenue increased to $2.7 million for the year ended December 31, 2021, compared
to $2.4 million for 2020. The Company recognized a 25% increase in subscription-based revenue, during a
year that included disruption in sales efforts for new subscriptions caused by COVID-19.
Classification of Operating Costs
The composition of the operating costs on the Consolidated Statements of Loss and Other Comprehensive
Loss is as follows:
U.S. $ millions
Personnel
Purchased services & materials
Facilities and other expenses
Travel
Personnel
2021
2020
$
$
5.6
2.9
0.7
0.1
9.3
5.4
2.3
0.6
0.1
8.4
$
$
Personnel expense includes direct labor, employee compensation, employee benefits, and commissions.
Personnel expense for the years ended December 31, 2021 and 2020 totaled $5.6 million and $5.4 million,
respectively. The increase is due to a small increase in headcount in production and innovation.
As of December 31, 2021, 41% of the headcount relates to software and data development, 32% is in the
Jakarta Production Center, 16% relates to sales and marketing and 16% is corporate services.
During 2021, the Company notified one employee of its intent to discontinue their employment. The
Company incurred $0.2 million in restructuring charges from this reduction.
Non-cash compensation expense is included in operating costs and relates to the Company’s omnibus
incentive plan, share options, and shares granted to employees and non-employees. Non-cash share-based
compensation for the years ended December 31, 2021 and 2020, increased to $146 thousand from $104
thousand, respectively. The change in compensation for non-cash share-based compensation period over
period resulted from the issuance of 188,159 restricted share units to both employees and directors and
advisors (see Note 15(e) to the Consolidated Financial Statements).
Purchased Services and Materials
Purchased services and materials (PS&M) includes (i) aircraft and radar related costs, including jet fuel; (ii)
insurance, professional and consulting costs; (iii) third-party support services related to the collection,
processing and editing of the Company’s airborne radar data collection activities; (iv) third-party data
collection activities (i.e., LiDAR, satellite imagery, air photo, etc.); and (v) third-party software expenses
(including maintenance and support).
For the years ended December 31, 2021 and 2020, PS&M expense was $2.9 million and $2.3 million,
respectively. The increase is primarily related to increased subcontractor charges on the acquisition services
project during 2021 compared to 2020.
2021 Annual Report | Management’s Discussion and Analysis
7
Facilities and Other Expenses
For the years ended December 31, 2021 and 2020, facilities and other expenses increased slightly to $0.7
million from $0.6 million.
Travel
For the years ended December 31, 2021 and 2020, travel expense remained unchanged at $0.1 million for
each year.
Government Grants
The Company participated in five government grant programs during 2021 and 2020 related to COVID-19
support and was eligible to receive $1.1 million during 2021 and $0.9 million during 2020 from these
programs (see Note 14 of the Consolidated Financial Statements).
Net (Loss) Income
Net loss worsened to a loss of $3.4 million from income of $26.5 million for the years ended December 31,
2021 and 2020, respectively, due to the gain on the modification of debt recognized during 2020 of $32.1
million.
Reconciliation of Non-IFRS Measures
To supplement the audited Consolidated Financial Statements, which are prepared and presented in
accordance with IFRS, the Company provides the following non-IFRS financial measures: EBITDA and
Adjusted EBITDA, as EBITDA and Adjusted EBITDA are included as a supplemental disclosure because
Management believes that such measurement provides a better assessment of the Company’s operations
on a continuing basis by eliminating certain non-cash charges or gains that are nonrecurring.
The term Earnings before interest, taxes, depreciation and amortization (EBITDA) consists of net income
(loss) and excludes interest (financing costs), taxes, and depreciation. Adjusted EBITDA also excludes share-
based compensation and other non-operating gains or losses.
The most directly comparable measure to EBITDA and Adjusted EBITDA calculated in accordance with IFRS
is net income (loss). The following is a reconciliation of the Company’s net loss to Adjusted EBITDA.
U.S. $ millions
Net (loss) income
Financing costs
Amortization of intangible assets
Depreciation of property and equipment
Depreciation of right of use assets
EBITDA
Share-based compensation
Restructuring costs
Loss on foreign currency translation
Gain on investment
Gain on modification of debt
Gain on disposal of equipment
Adjusted EBITDA
2021
2020
$
(3.4)
0.1
0.1
1.4
0.3
$
26.5
1.3
-
1.1
0.4
$
(1.5)
$
29.3
0.1
0.3
-
(1.1)
-
-
0.1
-
0.1
-
(32.1)
(0.1)
$
(2.2)
$
(2.7)
Adjusted EBITDA for the year ended December 31, 2021 was negative $2.2 million, compared to negative
$2.7 million for 2020. The improvement in Adjusted EBITDA is primarily attributable to the increase in
revenue, offset by an increase in operating costs.
2021 Annual Report | Management’s Discussion and Analysis
8
Financing Costs
Financing costs for the year ended December 31, 2021 totaled $61 thousand compared to $1.3 million for
2020. Financing costs during 2020 related mostly to the accretion of the notes payable interest using the
effective interest method. The note was paid in full on August 12, 2020.
Amortization of Intangible Assets
Amortization expense for intangible assets for the years ended December 31, 2021 and 2020 were $71
thousand and $Nil, respectively. Intangible assets were added to the balance sheet at the end of 2020 and
amortization on these assets started in 2021.
Depreciation of Property and Equipment
Depreciation expense for property and equipment for the years ended December 31, 2021 and 2020 were
$1.4 million and $1.1 million, respectively.
Depreciation of Right of Use Assets
Depreciation expense for right of use assets decreased slightly to $0.3 million for the year ended December
31, 2021, compared to $0.4 million during 2020.
Gain on Investment
Gain on investment was $1.1 million compared to $Nil for the years ended December 31, 2021 and 2020.
The 2021 gain was the result of the change in fair value of the investments and was estimated using a
market-based approach at each reporting period.
Gain on Modification of Debt
Gain on modification of debit was $Nil compared to $32.1 million for the years ended December 31, 2021
and 2020. The 2020 gain was due to the settlement agreement with the note holder on June 3, 2020.
Gain on Disposal of Equipment
Gain on disposal of equipment was $6 and $150 thousand for the years ended December 31, 2021 and
2020, respectively. In both years, the Company disposed of assets with a net book value of $Nil and received
cash proceeds equal to the recognized gains during the periods reported.
Amounts Receivable and Unbilled Revenue
Work is performed on contracts that provide invoicing upon the completion of identified contract
milestones. Revenue on certain of these acquisition services contracts is recognized using the percentage-
of-completion method of accounting based on the ratio of costs incurred to date over the estimated
total costs to complete the contract. While an effort is made to align payments on contracts with work
performed, the completion of milestones does not always coincide with the costs incurred on a contract,
resulting in revenue being recognized in excess of billings. These amounts are recorded in the consolidated
balance sheets as unbilled revenue.
Amounts receivable and unbilled revenue increased to $1.6 million at December 31, 2021 from $0.6
million at December 31, 2020. The Company reviews the amounts receivable aging monthly and monitors
the payment status of each invoice. The Company also communicates with slow paying or delinquent
customers on a regular basis regarding the schedule of future payments. At the balance sheet date, $Nil has
been reserved as uncollectible as all trade receivable balances greater than 90 days are highly likely to be
paid in full by the customer.
2021 Annual Report | Management’s Discussion and Analysis 9
Property and Equipment
Property and equipment include aircraft and engines, radar and mapping equipment, furniture and fixtures,
leasehold improvements and assets under construction. The decrease of property and equipment from
December 31, 2020 of $2.7 million to $2.5 million at December 31, 2021 is mainly due to depreciation of
$1.4 million, offset by additions of $1.2 million.
Intangible Assets
Intangible assets include data library products the Company builds with the use of proprietary software and
intellectual property for the use in software subscription and data license sales. The increase of intangible
assets from December 31, 2020 of $0.9 million to $1.1 million at December 31, 2021 relates to internal labor
to build the library of $0.3 million, offset by amortization of $0.1 million.
Accounts Payable and Accrued Liabilities
Accounts payable and accrued liabilities generally include trade payables, project-related accruals and
personnel-related costs. Accounts payable and accrued liabilities increased to $3.7 million at December 31,
2021 from $3.1 million at December 31, 2020.
U.S. $ millions
Accounts payable
Accrued liablities
Government Loans
December 31,
December 31,
2021
2020
$
2.0
$
1.6
1.7
1.5
$
3.7
$
3.1
The government loans balance remained flat at $0.5 million at December 31, 2021 and 2020. The loans were
available to help off-set the impacts of the COVID-19 pandemic and will be repaid.
Unearned Revenue and Deposits
The unearned revenue balance at December 31, 2021 increased to $1.7 million from $1.6 million at
December 31, 2020. This balance consists of payments received from customers for contracts that are in
progress and have not yet fulfilled the necessary revenue recognition criteria. At December 31, 2021 and
2020, 89% and 86% of the total balance, respectively, is related to software and solutions license revenue,
in which the license fee is paid upfront for the term of the license. The balance relates to the collection of
milestone billings on acquisition services contracts.
2021 Annual Report | Management’s Discussion and Analysis
10
QUARTERLY FINANCIAL INFORMATION
Selected Quarterly Information
The following table sets forth selected quarterly financial information for Intermap’s eight most recent fiscal
quarters. This information is unaudited, but reflects all adjustments of a normal, recurring nature that are,
in the opinion of management, necessary to present a fair statement of Intermap’s consolidated results of
operations for the periods presented. Quarter-to-quarter comparisons of Intermap’s financial results are not
necessarily meaningful and should not be relied on as an indication of future performance.
For the last eight quarters, the Company has been severely undercapitalized and was therefore
required to self-finance the advancement of high-growth opportunities in the insurance, aviation and
telecommunications verticals. As a result, revenue has been delayed. Management believes an improved
capital structure, including the Q3 2021 and Q1 2022 private placements raising gross proceeds of $4.1
million, will provide much needed investment in revenue growth.
U.S. $ millions, except per
share data
Q1
2020
Q2
2020
Q3
2020
Q4
2020
Q1
2021
Q2
2021(1)
Q3
2021
Q4
2021
Total revenue
Depreciation
Financing costs
$
1.6
$
1.2
$
1.0
$
0.9
$
0.9
$
1.2
$
1.4
$
2.3
$
0.3
$
0.3
$
0.3
$
0.2
$
0.3
$
0.4
$
0.4
$
0.3
$
0.8
$
0.5
$
-
$
-
$
-
$
-
$
0.1
$
-
Operating (loss) income
$
(1.1)
$
(1.4)
$
(1.3)
$
(1.4)
$
(1.8)
$
(1.7)
$
(1.2)
$
(0.8)
Net (loss) income
$
(1.8)
$
29.2
$
(1.3)
$
0.4
$
(1.1)
$
(1.6)
$
(1.0)
$
0.3
Net (loss) income per share
- basic
- diluted
Adjusted EBITDA(2)
$
(0.10)
$
1.79
$
(0.15)
$
(0.26)
$
(0.04)
$
(0.06)
$
(0.04)
$
(0.10)
$
1.71
$
(0.15)
$
(0.26)
$
(0.04)
$
(0.06)
$
(0.04)
$
0.02
$
0.02
$
(0.6)
$
(0.3)
$
(0.9)
$
(0.9)
$
(0.6)
$
(0.8)
$
(0.5)
$
(0.3)
(1)Operating income (loss) and net income (loss) amounts have been adjusted as a result of an adjustment identified in
connection with issuing our condensed consolidated financial statements for the period ended September 30, 2021.
(2)Adjusted EBITDA is a non-IFRS measure. See “Reconciliation of Non-IFRS Measures” above.
During the periods in the above table, Intermap’s results were impacted by the following factors and trends:
•
•
Starting in Q1 2020, the COVID-19 pandemic created disruption to both the government and
commercial market segments as governments focused resources on response to the virus and
commercial aviation was reduced over 90% globally;
Intermap experienced immediate delays in government contracting, and closed its first government
contract in 5 quarters in Q2 2021;
• With additional government contract awards announced in Q3 2021, the Company is beginning to
experience improvements in revenue;
• With the support of the COVID-19 wages subsidy programs in the United States and Canada, Intermap
was able to retain key talent to build automation and process improvements, resulting in increased
fixed assets and depreciation, beginning in Q1 2021
Quarterly Revenue
Consolidated revenue for the fourth quarter of 2021 totaled $2.3 million, compared to $0.9 million for
the same period in 2020, representing a 156% increase. Approximately 85% of consolidated revenue was
generated outside the United States, compared to 73% for 2020. When compared to the second and third
quarters of 2021, consolidated revenue for the quarter ended December 31, 2021 grew sequentially by 19%
and 71% each quarter, respectively.
2021 Annual Report | Management’s Discussion and Analysis 11
Acquisition Services
Acquisition services revenue for the quarter ended December 31, 2021 totaled $1.2 million, compared to
$8 thousand for 2020. The increase is due to the nature and timing of government contracting, which was
delayed starting in 2021 due to the impact of uncertainty surrounding the COVID-19 pandemic.
Value-added Data
Value-added data revenue increased to $0.4 million for the quarter ended December 31, 2021 as compared
to $0.3 million for 2020. The increase was primarily due to a new strategic contract award with the National
Geospatial-Intelligence Agency to provide continually updated elevation and feature datasets.
Software and Solutions
Software and solutions revenue increased to $0.7 million from $0.6 million for the fourth quarters of 2021
and 2020, respectively. The Company recognized a 13% increase in subscription-based revenue, during a
year that included disruption in sales efforts for new subscriptions caused by COVID-19.
Personnel
Personnel expense for the three-month periods ended December 31, 2021 and 2020, totaled $1.4 million
and $1.3 million, respectively.
Non-cash compensation expense for the quarters ended December 31, 2021 and 2020, increased to $45
thousand from $19 thousand, respectively.
Purchased Services and Materials
For the three-month periods ended December 31, 2021 and 2020, PS&M expense was $1.1 million and $0.5
million, respectively. The increase was due to continued increased spending on acquisition revenue projects
during the end of 2021.
Facilities and Other Expenses
For the three-month periods ended December 31, 2021 and 2020, facilities and other expenses were $0.2
million for both periods.
Travel
For the quarters ended December 31, 2021 and 2020, travel expense was $66 thousand and $9 thousand,
respectively.
2021 Annual Report | Management’s Discussion and Analysis 12
USE OF PROCEEDS
The Company completed the following Private Placements with the proposed use of proceeds for working
capital to fund continuing operations.
U.S. $ millions
Proposed use of net proceeds
Use of proceeds
Remaining
Actual use of net proceeds
August 2020 Private Placement
Continuing operations
Net proceeds
November 2020 Private Placement
Continuing operations
Net proceeds
April 2021 Private Placement
Continuing operations
Net proceeds
July 2021 Private Placement
Continuing operations
Net proceeds
August 2021 Private Placement
Continuing operations
Net proceeds
September 2021 Private Placement
Continuing operations
Net proceeds
$
1.6
$
1.6
$
-
$
1.6
$
1.6
$
-
$
2.6
$
2.6
$
-
$
2.6
$
2.6
$
-
$
0.4
$
0.4
$
-
$
0.4
$
0.4
$
-
$
1.3
$
1.3
$
-
$
1.3
$
1.3
$
-
$
0.7
$
0.7
$
-
$
0.7
$
0.7
$
-
$
0.3
$
0.1
$
0.2
$
0.3
$
0.1
$
0.2
The Company has cash of $0.2 million at December 31, 2021.
CONTRACTUAL OBLIGATIONS
Contractual obligations include (i) lease obligations on office locations and computer equipment; (ii) project
financing; (iii) government loans; and (iv) operating leases on low value equipment. Principal and interest
repayments of these obligations are as follows:
Payments due by Period (US $ thousands)
Contractual obligations
Lease obligations
Project financing
Government loans
Operating leases
Total
Total
$
577
188
638
126
1,529
$
Less than 1 year
282
$
-
9
126
417
$
$
1 - 3 years
234
188
277
-
699
$
4 - 5 years After 5 years
61
$
-
145
-
206
$
$
-
-
207
-
207
$
LIQUIDITY AND CAPITAL RESOURCES
Management continually assesses liquidity in terms of the ability to generate sufficient cash flow to fund
the business. Net cash flow is affected by the following items: (i) operating activities, including the level
of trade receivables, unbilled receivables, accounts payable, accrued liabilities and unearned revenue;
(ii) investing activities, including the purchase of property and equipment; and (iii) financing activities,
including debt financing and the issuance of capital stock.
2021 Annual Report | Management’s Discussion and Analysis
13
Operating Activities
During the year ended December 31, 2021, the Company generated an operating loss of $5.5 million and
incurred negative Adjusted EBITDA1 of $2.2 million. Revenue for the year ended December 31, 2021 was
$5.8 million, which is a $1.1 million increase as compared to the same period in 2020. At December 31, 2021,
the Company has a shareholders’ equity of $0.9 million.
Cash used in operations during the year ended December 31, 2021 totaled $2.5 million, compared to $2.0
million during the same period in 2020.
At December 31, 2021, the Company has a deficiency of current assets of $2.3 million and current liabilities
of $5.6 million, resulting in a working capital deficit of $3.4 million. Of that balance, $1.7 million relates
to unearned revenue, which is the accounting treatment for contracts in which the revenue recognition
criteria have not been met at the time of payment. The Company has the obligation to deliver the required
services (software) over the term of the license, and there is no incremental cash cost or payment. At
the end of the third quarter of 2021, the Company began executing on new contract awards exceeding
$4.1 million to be recognized over the next 12 months, in addition to the recurring revenue base of $4.7
million recognized during 2020, while contracting was delayed due to COVID-19, along with significant
government and commercial pipeline, and as such, management expects to meet the obligations as they
come due through operations.
Investing Activities
Net cash used in investing activities totaled $1.4 million and $0.3 million for the years ended December 31,
2021 and 2020, respectively. Net cash used in investing activities in 2021 related to the purchase of radar
equipment, avionics upgrades, computer related equipment and the capitalization of labor and materials to
build the data archive, processing capabilities, and software assets. For the year ended December 31, 2020,
the balance related to the purchase of computer related equipment and the capitalization of labor and
materials to build the data archive, processing capabilities, and software assets, offset by proceeds from the
sale of property and equipment of $0.2 million.
Financing Activities
Net cash provided by financing activities totaled $2.3 million for the year ended December 31, 2021, as
compared to cash provided by financing activities of $2.9 million in 2020. The net cash provided during the
year ended December 31, 2021 resulted from proceeds from a private placement of $3.0 million offset by
private placement issuance costs of $0.4 million and the payment of lease obligations of $0.3 million. The
net cash used during the year ended December 31, 2020 resulted from payment of lease obligations of $0.5
million, repayment of project financing of $0.3 million, issuance cost of $0.5 million and repayment of notes
payable of $1.0 million. This was offset by proceeds from the Small Business Administration loan of $0.5
million, and private placement proceeds of $4.7 million.
The Company is dependent upon its cash flow from operations to fund its business as it currently has no
line of credit or credit facility in place.
The above factors may be exacerbated by the ongoing COVID-19 pandemic and in the aggregate indicate
there are material uncertainties which may cast significant doubt about the Company’s ability to continue
as a going concern. In response to the COVID-19 pandemic the Company has taken actions to adapt to the
current environment using teleconference platforms for trainings, customer meetings and conferences, and
manage liquidity by participating in various government support programs, where applicable, including
wage subsidies, tax payment deferrals and favorable credit facilities. The Company’s ability to continue as a
going concern is dependent on management’s ability to successfully secure sales with upfront payments,
and / or obtain additional financing. Failure to achieve one or more of these requirements could have a
materially adverse effect on the Company’s financial condition and / or results of operations. The Board
1 Adjusted EBITDA is a non-IFRS measure. See “Reconciliation of Non-IFRS Measures above”
2021 Annual Report | Management’s Discussion and Analysis 14
of Directors and management continue to take actions to address these issues including raising capital
through a private placement, exploring options for additional capital and material contracts executed
during the third quarter, exceeding $4.1 million to be recognized over the next twelve months and during
the fourth quarter, expected to exceed $3.0 million to be recognized over the next twenty-four months.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
Revenue Recognition
Revenue is recognized when a customer obtains control of the good or services. Determining the timing of
the transfer of control, at a point in time or overtime, requires judgement.
Acquisition Service Contracts
Revenue from acquisition service contracts is recognized over time based on the ratio of costs incurred to
estimated total contract costs. The use of this method of measuring progress towards complete satisfaction
of the performance obligations requires estimates to determine the cost to complete each contract. These
estimates are reviewed monthly and adjusted as necessary. Provisions for estimated losses, if any, are
recognized in the period in which the loss is determined. Invoices are issued according to contractual terms
and are usually payable within 30 days. Revenue recognized in advance of billings are presented as unbilled
revenue.
Data Licenses
Revenue from the sale of data licenses in the ordinary course of business is measured at the fair value of
the consideration received or receivable. Customers obtain control of data products upon receipt of a
physical hard drive or download of the data from a web link provided. Invoices are generated, and revenue
is recognized at that point in time. Invoices are generally paid within 30 days.
Software Subscriptions
Software subscriptions are paid at the beginning of the license term. Revenue is recognized overtime, and
payments for future months of service are recognized in unearned revenue. While the license agreements
are for a fixed term, some agreements also contain a limited number of clicks or uses. If the limit is reached
prior to the end of the term, the license ends early.
Use of estimates
Preparing financial statements in conformity with IFRS requires management to make judgments, estimates
and assumptions that affect the application of accounting policies and reported amounts of assets and
liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the
reported amounts of revenue and expenses during the period. Actual results could differ from these
estimates.
Information about assumptions and estimation uncertainties that have a significant risk of resulting in a
material adjustment within the next financial year include the following:
Depreciation and amortization rates
In calculating the depreciation and amortization expense, management is required to make estimates of
the expected useful lives of property and equipment and intangible assets.
Amounts receivable
The Company uses historical trends and performs specific account assessments when determining the
expected credit losses. These accounting estimates are in respect to the amounts receivable line item in the
Company’s consolidated balance sheet. At December 31, 2021, amounts receivables represented 12% of
total assets.
The estimate of the Company’s expected credit losses could change from period to period due to the
2021 Annual Report | Management’s Discussion and Analysis 15
allowance being a function of the balance and composition of trade receivables. At December 31, 2021, the
expected credit losses of trade receivables were $Nil due to no receivables were aged over 61 days past due.
Investments
The valuation and accounting for investments requires the application of management estimates and
judgments with respect to the determination of appropriate valuation method applied at each reporting
date. The assumptions for estimating fair value of investments are disclosed in Note 8 to the Consolidated
Financial Statements.
Share-based compensation
The Company uses the Black-Scholes option-pricing model to determine the grant date fair value of share-
based compensation. The following assumptions are used in the model: dividend yield; expected volatility;
risk-free interest rate; expected option life; and fair value.
Changes to assumptions used to determine the grant date fair value of share-based compensation awards
can affect the amounts recognized in the consolidated financial statements.
Government loans
The Company has received a loan with no stated interest obligation. The valuation and accounting for
the zero-interest loan requires the application of management estimates and judgments with respect to
the determination of appropriate valuation method applied on initial recognition. The assumptions for
estimating fair value of the loan is disclosed in Note 10(c) to the Consolidated Financial Statements.
Revenue
Revenue from acquisition service contracts is recognized over time based on the ratio of costs incurred to
estimated total contract costs. The determination of estimated total contract costs of acquisition services
contracts requires the use of significant assumptions related to estimated purchased services, materials,
and labor costs. Changes to the assumptions used to measure revenue could impact the amount of revenue
recognized in the Consolidated Financial Statements.
Impairment
The carrying value of long-lived assets are reviewed for impairment whenever events or changes in
circumstances indicate that their carrying amounts may not be recoverable and assesses the impairment
for intangible assets not yet available for use on an annual basis. The Company has determined that its
long-lived assets belong to two distinct cash-generating units (CGUs). The significant assumptions used
in determining estimated discounted future cash flows include projected revenues and discount rates.
Judgment is required in determining the level at which to test impairment, including the grouping of CGUs
that generate cash inflows.
OFF-BALANCE SHEET ARRANGEMENTS
As at March 31, 2022 and December 31, 2021, the Company did not have any material off-balance sheet
arrangements.
OUTSTANDING SHARE DATA
The Company’s authorized capital consists of an unlimited number of Class A common shares without par
value and an unlimited number of Class A participating preferred shares without par value. At the close of
business on March 31, 2022, 33,423,710 Class A common shares were issued and outstanding. There are
currently no Class A participating preferred shares issued and outstanding.
2021 Annual Report | Management’s Discussion and Analysis 16
As of March 31, 2022, potential dilutive securities include (i) 822,943 outstanding share options with a
weighted average exercise price of C$0.77, (ii) 2,370,884 restricted share units, and (iii) 545,569 warrants
outstanding with a weighted average exercise price of US$0.62. Each option and warrant entitles the holder
to purchase one Class A common share. The following warrants expire on the dates listed below:
•
•
•
•
•
•
•
•
•
139,284 warrants expire on July 31, 2022;
19,718 warrants expire on August 14, 2022;
60,000 warrants expire on April 27, 2023;
131,166 warrants expire on July 29, 2023;
45,000 warrants expire on August 8, 2023;
12,000 warrants expire on August 17, 2023
6,666 warrants expire on September 19, 2023
43,500 warrants expire on February 10, 2024; and
88,235 warrants expire on March 18, 2024
Other than as listed above, the Company does not currently have any material financial instruments which
can be converted into additional common shares.
INTERNAL CONTROLS AND DISCLOSURE CONTROLS AND PROCEDURES
Internal Control Over Financial Reporting
The Company’s Chairman and Chief Executive Officer and the Company’s Chief Financial Officer have
designed, or have caused to be designed under their supervision, internal control over financial reporting
as defined under National Instrument 52-109 – Certification of Disclosure in Issuer’s Annual and Interim
Filings, to provide reasonable assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with IFRS. The Company’s Chairman and Chief
Executive Officer and the Company’s Chief Financial Officer have evaluated, or caused to be evaluated
under their supervision, the effectiveness of the Company’s internal control over financial reporting and
have determined, based on the criteria established by the Committee of Sponsoring Organizations of the
Treadway Commission (2013) and on this evaluation, that such internal controls over financial reporting
were effective at December 31, 2021.
Changes in Internal Control Over Financial Reporting
There have been no significant changes in the design of internal control over financial reporting that
occurred during the year ended December 31, 2021 that has materially affected, or is reasonably likely to
materially affect, the Company’s internal control over financial reporting.
Disclosure Controls and Procedures
The Company’s Chairman and Chief Executive Officer and the Company’s Chief Financial Officer have
designed, or have caused to be designed under their supervision, disclosure controls and procedures to
provide reasonable assurance that material information relating to the Company has been made known to
them and that information required to be disclosed in the Company’s annual filings, interim filings or other
reports filed by it or submitted by it under securities legislation is recorded, processed, summarized and
reported within the time periods specified by applicable securities legislation. The Company’s Chairman and
Chief Executive Officer and the Company’s Chief Financial Officer have evaluated, or caused to be evaluated
under their supervision, the effectiveness of the Company’s disclosure controls and procedures and have
determined, based on that evaluation, that such disclosure controls and procedures were effective at
December 31, 2021.
2021 Annual Report | Management’s Discussion and Analysis 17
RISKS AND UNCERTAINTIES
The risks and uncertainties described below are not exhaustive. Additional risks not presently known
currently deemed immaterial may also impair the Company’s business operation. If any of the events
described in the following business risks actually occur, overall business, operating results, and the financial
condition of the Company could be materially adversely affected.
Negative Cash Flow from Operating Activities
The Company did not achieve positive operating cash flow in its most recently completed financial year.
Accordingly, the Company may experience negative cash flow from operations in the future. The Company
has incurred net losses in the past and may incur losses in the future unless it can derive sufficient revenues
from its business. Such future losses could have an adverse effect on the market price of the Securities,
which could cause investors to lose part or all of their investment.
Cash Flow and Liquidity Uncertainty
The Company is dependent upon its cash flow from operations to fund its business because it has no line of
credit or credit facility currently in place. As of December 31, 2021, the Company had cash on hand of $0.2
million and a deficiency of current assets of $2.3 million and current liabilities of $5.6 million, resulting in
a working capital deficiency of $3.4 million. Given the Company’s cash balance, together with its potential
sources of funding and working capital needs, including raising gross proceeds of $1.6 million from an
issuer private placement subsequent to yearend, the Company believes it has sufficient cash to fund its
operations for the next 12 months. This expectation reflects certain assumptions of management, including,
among other things, growth estimates in respect of the Company’s revenues based on the Company’s
ability to successfully secure sales with upfront payments, and anticipated levels of capital expenditures and
other costs expected to be incurred over the next 12 months. If these assumptions prove to be incorrect
and the Company generates negative operating cash flows in a future period, the Company may need to
obtain alternative sources of funding. However, there can be no assurance that additional funding will be
available or, if available, that it will be available on acceptable terms. If adequate funds are not available, the
Company may have to substantially reduce or otherwise eliminate certain expenditures, which could have
a material adverse effect on the Company’s operations and financial condition. There can be no assurance
that the Company will be able to raise additional capital if its capital resources are depleted or exhausted.
Availability of Capital
Cash generated from its operations may not be enough to satisfy its current liquidity requirements. As such,
the Company will require additional capital. The extent of the Company’s future capital requirements will
depend on many factors, including, but not limited to, the market acceptance of its products and services,
demand for geospatial related products and service, and competition within this industry. No assurance can
be given that any such additional funding will be available or that, if available, it can be obtained on terms
favorable to the Company.
Revenue Fluctuations
Intermap’s revenue has fluctuated over the years. Acquisition services projects, the purchase of value-
added data, and the purchase of software and solutions by the Company’s customers are all scheduled per
customer requirements and the timing of regulatory and/or budgetary decisions. The commencement or
completion of acquisition projects within a particular quarter or year, the timing of regulatory approvals,
operating decisions of clients, and the fixed-cost nature of Intermap’s business, among other factors, may
cause the Company’s results to vary significantly between fiscal years and between quarters in the same
fiscal year.
2021 Annual Report | Management’s Discussion and Analysis 18
Nature of Government Contracts
Intermap conducts a significant portion of its business either directly or in cooperation with the United
States government, other governments around the world, and international funding agencies. In many
cases, the terms of these contracts provide for cancellation at the option of the government or agency
at any time. In addition, many of Intermap’s products and services require government appropriations
and regulatory licenses, permits, and approvals, the timing and receipt of which are not within Intermap’s
control. Any of these factors could have an effect on Intermap’s revenue, earnings, and cash flow.
Foreign Operations
A significant portion of Intermap’s revenue is expected to come from customers outside of the United
States and is therefore subject to additional risks, including impacts of the spread of COVID-19 on customer
operations, foreign currency exchange rate fluctuations, agreements that may be difficult to enforce,
receivables difficult to collect through a foreign country’s legal system, and the imposition of foreign-
country-imposed withholding taxes or other foreign taxes.
COVID-19 Pandemic
The current COVID-19 global health pandemic continues to significantly impact the global economy. The
full extent and impact of the COVID-19 pandemic remains unknown, but to date has included, at various
times in the past 24 months, extreme volatility in financial markets and slowdowns in economic activity. It
is uncertain how long the COVID-19 pandemic will persist. The international response to COVID-19 has led
to significant restrictions on travel, temporary business closures, quarantines and a general reduction in
consumer activity, globally. The COVID-19 pandemic has adversely effected Intermap’s business, financial
condition and results of operations as described in this Annual MD&A the Company’s audited Consolidated
Financial Statements and the accompanying notes for the years ended December 31, 2021 and 2020, and
may continue to do so if the pandemic and its effects on world economics persist. Intermap has participated
in a number of government assistance programs that were made available by various government agencies
to support COVID-19 relief, including the Paycheck Protection Program, Canada Emergency Wage Subsidy,
National Research Council Industrial Assistance Program and the Employee Retention Credit.
Dilution
The Company may issue additional securities, which may dilute existing securityholders, including
purchasers of the Securities hereunder. The Company may also issue debt securities that have priority over
holders of other Securities with respect to payment in the event of an insolvency or winding-up of the
Company. Securityholders will have no pre-emptive rights in connection with any such further issuances.
The Company’s board of directors has the discretion to determine the price and terms of any Debt Securities
and the price and terms for any issuances of Common Shares, Preferred Shares, Subscription Receipts,
Warrants and Units.
Key Customers
During 2021, the Company had two key customers that accounted for 32% of total revenue. During 2020,
40% of the revenue was attributable to three key customers. To the extent that significant customers cancel
or delay orders, Intermap’s revenue, earnings, and cash flow could be materially and adversely affected.
Executive Talent
Intermap is focused on aligning its resources with its acquisition services, value-added data and software
and solutions revenue opportunities. This realignment requires the retention of executive talent. The
Company will continue to invest in training and leadership development to retain talent.
2021 Annual Report | Management’s Discussion and Analysis 19
Competing Technologies
With respect to the Company’s software applications, several direct and indirect competitors are currently
in the market with product offerings that could be considered at least partially competitive to Intermap’s
products. These potential competitors vary in size and could have greater technical and/or financial
resources than the Company, to develop and market their products. The financial performance of the
Company may be adversely affected by such competition.
Intermap continues to evaluate its data collection capabilities and look for improvements to the
performance of its radar technology. Although there are only a few direct Intermap competitors currently,
the industry is characterized by rapid technological progress. Intermap’s ability to continue to develop
and introduce new products and services, or incorporate enhancements to existing products and services,
may require significant additional research and development expenditures and investments in support
infrastructure.
Another approach to production of digital elevation models is the use of auto correlation software to
analyze common points in two or more optical images of the same area taken from different viewing
angles. Essentially this is the same principle that is used by technicians as they extract elevation points
using stereo photogrammetric techniques, but in this case, it is automated using computer software image
matching algorithms. This process is well known and has seen incremental, evolutionary improvement over
time. Advances in computing power, coupled with massive storage solutions, may make this technology
useful over larger areas in the future, and if so, could represent a significant competing technology.
Any required additional financing needed by the Company to remain competitive with these other
technologies may not be available or, if available, may not be on terms satisfactory to the Company.
Common Share Price Volatility
The market price of the Company’s common shares has fluctuated widely in recent periods and is likely
to continue to be volatile. A number of factors can affect the market price of Intermap’s common stock
including (i) actual or anticipated variations in operating results, (ii) the low daily trading volume of the
Company’s stock, (iii) announcement of technological innovations or new products by the Company or its
competitors, (iv) competition, including pricing pressures and the potential impact of competitors products
on sales, (v) changing conditions in the geospatial and related industries, (vi) unexpected production
difficulties, (vii) changes in financial estimates or recommendations by stock market analysts regarding
Intermap or its competitors, (viii) announcements by Intermap or its competitors of acquisitions, strategic
partnerships, or joint ventures, (ix) additions or departures of senior officers, (x) changes in economic or
political conditions (xi) the selling of significant holdings by large investors, and (xii) the Company’s ability
to meet the continued listing requirements of the Toronto Stock Exchange to maintain the listing of its
common shares.
Loss of Proprietary Information
Intermap currently holds patents on the technology used in its operations and relies heavily on trade
secrets, know-how, expertise, experience, and the marketing ability of its personnel to remain competitive.
Although Intermap requires all employees, consultants, and third parties to agree to keep its proprietary
information confidential, no assurance can be given that the steps taken by Intermap will be effective in
deterring misappropriation of its technologies. Additionally, no assurance can be given that employees
or consultants will not challenge the legitimacy or scope of their confidentiality obligations, or that third
parties, in time, could not independently develop and deploy equivalent or superior technologies.
Software Functionality
Defects in the Company’s software applications, delays in delivery, and failures or mistakes in the Company’s
software code could materially harm the Company’s business, including customer relationships and
operating results.
2021 Annual Report | Management’s Discussion and Analysis 20
Internet and System Infrastructure Functionality
The end customers of the Company’s software applications depend on internet service providers, online
service providers and the Company’s infrastructure for access to the software applications the Company
provides to its customers. These services are subject to service outages and delays due to system failures,
stability or interruption. As a result, the Company may not be able to meet a satisfactory level of service
as agreed to with its customers, which could have a material adverse effect on the Company’s business,
revenues, operating results and financial condition.
Information Technology Security
The Company’s software applications are dependent on its ability to protect its computer equipment
and the information stored in its data centers against damage that may be caused by fire, power loss,
telecommunication failures, unauthorized intrusion, computer viruses, disabling devices and other similar
events. A failure in the Company’s production systems or a disaster or other event affecting production
systems or business operations, both internally and externally, could result in a disruption to the Company’s
software services. Such a disruption could also impact the Company’s reputation and cause it to lose
customers, revenue, face litigation, or necessitate customer service/repair work that would involve
substantial costs and could ultimately have a material impact on the Company.
Intermap’s geospatial database is a valuable asset to the Company. While Intermap has invested in database
management, information technology security, firewalls, and offsite duplicate storage, there is a risk of a loss
of data through unauthorized access or a customer violating the terms of the Company’s end user licensing
agreements and distributing unauthorized copies of its data. Intermap has, and will continue to invest, in
both legal resources to strengthen its licensing agreements with its customers and in overall information
technology protection.
Cybersecurity
The Company’s software applications and geospatial database are dependent upon protection against
damage or loss that may be caused by a cyberattack. Loss or theft of the Company’s geospatial database
could result in lost revenue or the ability of a competitor to provide competing software solutions. A hostile
Denial of Service (DoS) action could disrupt the Company’s software services. Such a disruption could
impact the Company’s reputation and cause it to lose customers, revenue, face litigation, or necessitate
customer service/repair work that would involve substantial costs and could ultimately have a material
impact on the Company.
Intermap has invested in database management, information technology security, and firewalls to mitigate
the risk of loss or theft of the Company’s data. Further investments have been made to prevent DoS
activities and improvements to the software services’ defenses against such attacks.
The Company undertakes periodic reviews of its information technology infrastructure and security policies
using the SANS CIS Critical Security Controls as a framework. The areas of focus for review pertain to user
and system authentication and access; internal network configuration and security; data storage resiliency
and security; and hosted application access security. These periodic reviews serve to proactively shore up
areas of vulnerability and ensure policies are effective and enforced. However, the risk cannot be eliminated
entirely, and the Company has invested in insurance to mitigate loss in the event of a cyberattack.
Exporting Products – Political Considerations
Intermap’s data collection systems contain technology that is classified as a defense article under the
International Traffic and Arms Regulations. All mapping efforts undertaken outside the United States,
therefore, constitute a temporary export of a defense article, requiring prior written approval by the United
States Department of State for each country within which mapping operations are to be performed. The
Company does not currently anticipate that requirements for export permits will have a material impact on
2021 Annual Report | Management’s Discussion and Analysis 21
the Company’s operations, although either government policy or government relations with select foreign
countries may change to the point of affecting the Company’s operational opportunities.
Environmental Regulation
Changes in environmental regulation could have an adverse effect on the Company’s airborne data
acquisition services business. For example, requirements for cleaner burning aircraft fuel could result in
increased costs which could impact the Company’s pricing model for acquisition services projects. The
complexity and breadth of environmental and climate change related issues make it extremely difficult to
predict the potential impact on the Company. Compliance with environmental regulation can be costly,
and non-compliance can result in fines, penalties and loss of licenses.
Political Instability
Political or significant instability in a region where Intermap is conducting data collection activities, or
where Intermap has clients, could adversely impact Intermap’s business.
Regulatory Approvals
The development and application of certain of the Company’s products requires the approval of applicable
regulatory authorities. A failure to obtain such approval on a timely basis, or material conditions imposed by
such authority in connection with the approval, would materially affect the prospects of the Company.
Aircraft / Radar Lost or Damaged
Although the Company believes that the probability of one of the Company’s aircraft or radar sustaining
significant damage or being lost in its entirety is extremely low, such damage or loss could occur. The
Company expects to have available to it, for data collection purposes, one additional aircraft at any given
time. The risk to the Company of loss from the damage of an aircraft is therefore considered to be minimal.
In the event that a radar mapping system is lost in its entirety through the destruction of the aircraft, it
would take the Company approximately six to nine months to replace the lost equipment, if required.
Global Positioning System (GPS) Failure
GPS satellites have been available to the commercial market for many years. The continued unrestricted
access to the signals produced by these GPS satellites are helpful, but not required, in the collection of the
Company’s IFSAR data. A loss of GPS would have such a global impact that it is believed that controlling
authorities would almost certainly make another system available to GPS receivers in relatively short order.
Information Openly Available to the Public
The Company accesses information available to the public via the Internet and may incorporate portions
of such information into its products. If a source of public information determined that the Company was
profiting from free information, there is risk it could seek compensation.
Force Majeure
The Company’s projects may be adversely affected by risks outside the control of the Company including
labor unrest, civil disorder, war, subversive activities or sabotage, fires, floods, explosions or other
catastrophes, epidemics, or quarantine restrictions.
Additional Information
Additional risk factors may be detailed in the Company’s Annual Information Form, which can be found on
the Company’s Web site at www.intermap.com and on SEDAR at www.sedar.com.
2021 Annual Report | Management’s Discussion and Analysis 22
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2021 Annual Report | Management’s Discussion and Analysis Management’s Report
23
The accompanying financial statements of Intermap Technologies Corporation and all the information
in this annual report are the responsibility of the Company‘s management. The consolidated financial
statements have been prepared by management in accordance with International Financial Reporting
Standards, as issued by the International Accounting Standards Board, using best estimates and judgments,
where appropriate. Management has prepared the financial information presented elsewhere in this annual
report and has ensured that it is consistent with the financial statements.
Management maintains appropriate systems of internal control that provide reasonable assurance that
assets are adequately safeguarded and that the financial reports are sufficiently well-maintained for the
timely preparation of the consolidated financial statements.
The Audit Committee members, all of whom are non-management directors, are appointed by the Board of
Directors. The Committee has reviewed these statements with the Auditors and management. The Board of
Directors has approved the financial statements of the Company, which are contained in this report.
Patrick A. Blott
Chairman of the Board and
Chief Executive Officer
Jennifer S. Bakken
Executive Vice President and
Chief Financial Officer
24
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Independent Auditors’ Report
25
TO THE SHAREHOLDERS OF INTERMAP TECHNOLOGIES CORPORATION
Opinion
We have audited the consolidated financial statements of Intermap Technologies Corporation (the Entity),
which comprise:
•
•
•
•
•
the consolidated balance sheets as at December 31, 2021 and December 31, 2020
the consolidated statements of (loss) income and other comprehensive (loss) income for the years then
ended
the consolidated statements of changes in shareholders’ (deficiency) equity for the years then ended
the consolidated statements of cash flows for the years then ended
and notes to the consolidated financial statements, including a summary of significant accounting
policies
(Hereinafter referred to as the “financial statements”).
In our opinion, the accompanying financial statements present fairly, in all material respects, the
consolidated financial position of the Entity as at December 31, 2021 and December 31, 2020, and its
consolidated financial performance and its consolidated cash flows for the years then ended in accordance
with International Financial Reporting Standards (IFRS).
Basis for Opinion
We conducted our audit in accordance with Canadian generally accepted auditing standards. Our
responsibilities under those standards are further described in the “Auditors’ Responsibilities for the Audit of
the Financial Statements” section of our auditors’ report.
We are independent of the Entity in accordance with the ethical requirements that are relevant to our audit
of the financial statements in Canada and we have fulfilled our other ethical responsibilities in accordance
with these requirements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Material Uncertainty Related to Going Concern
We draw attention to Note 2(a) in the financial statements, which indicates that Intermap Technologies
Corporation has incurred recurring operating losses in current and prior years, negative cash flows in the
current year, and has negative working capital at December 31, 2021.
As stated in Note 2(a) in the financial statements, these events or conditions, along with other matters as
set forth in Note 2(a) in the financial statements, indicate that a material uncertainty exists that may cast
significant doubt on the Entity’s ability to continue as a going concern.
Our opinion is not modified in respect of this matter.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the financial statements for the year ended December 31, 2021. These matters were addressed in
the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters.
In addition to the matter described in the “Material Uncertainty related to Going Concern” section of
the auditors’ report, we have determined the matters described below to be the key audit matters to be
communicated in our auditors’ report.
26
Independent Auditors’ Report
Evaluation of Impairment of Long-Lived Assets
Description of the matter
We draw attention to Notes 2(d)(vii), 3(j), 5, 6 and 7 to the financial statements. The long-lived assets of
the Entity consist of property and equipment, intangible assets and right of use assets. The property and
equipment, intangible assets and right of use assets balances are $2,480 thousand, $1,117 thousand
and $497 thousand, respectively. The Entity reviews long-lived assets for impairment whenever events
or changes in circumstances indicate that their carrying amounts may not be recoverable and assesses
impairment for intangible assets not yet available for use on an annual basis. In testing for impairment, the
recoverable amount of cash generating units (CGUs) are estimated in order to determine the extent of the
impairment loss, if any. The determination of the recoverable amount is based on each CGU’s value in use
and requires the Entity to make significant estimates and assumptions which include projected revenues
and discount rates.
Why the matter is a key audit matter
We identified the evaluation of the impairment of long-lived assets as a key audit matter. This matter
represented an area of significant risk of material misstatement given the magnitude of the long-lived
assets. This matter required significant auditor judgment in evaluating the results of our audit procedures
due to the high degree of estimation uncertainty involved in the Entity’s estimates and assumptions.
How the matter was addressed in the audit
The following are the primary procedures we performed to address this key audit matter:
We compared the Entity’s historical revenue projections to actual results to assess the Entity’s ability to
accurately project revenues.
We evaluated the Entity’s projected revenue assumptions for each CGU by comparing those assumptions to
2021 actual results and the Entity’s expected growth plans. We took into account changes in conditions and
events affecting each CGU to assess the adjustments or lack of adjustments made in arriving at projected
revenues.
We involved valuation professionals with specialized skills and knowledge to assist in assessing the discount
rate assumptions used in the estimated recoverable amounts, by comparing them to discount rate ranges
that were independently developed using publicly available market data and considering the risk profile of
each CGU.
Estimated total contract costs of acquisition services contracts
Description of the matter
We draw attention to Notes 2(d)(vi), 3(k)(iii) and 12 of the financial statements. For the year ended
December 31, 2021, the Entity recognized acquisition services revenue of $1,403 thousand. Revenue from
acquisition services contracts, which are fixed-price contracts, is recognized over time based on the ratio
of costs incurred to estimated total contract costs. The determination of estimated total contract costs of
acquisition services contracts requires the use of significant assumptions related to estimated purchased
services, materials, and labor costs.
Why the matter is a key audit matter
We identified the evaluation of the estimated total contract costs of acquisition services contracts as a key
audit matter. This matter represented a significant risk of material misstatement and significant auditor
judgment was required in evaluating the results of our audit procedures relating to the Entity’s significant
assumptions noted above.
How the matter was addressed in the audit
The following are the primary procedures we performed to address this key audit matter:
Independent Auditors’ Report
27
We evaluated the design and tested the operating effectiveness of a control within the Entity’s revenue
process related to the review of estimated total contract costs of acquisition services contracts.
We evaluated the Entity’s historical ability to estimate total contract costs of acquisition services contracts
by comparing the total actual costs for a selection of contracts completed in the current year against the
total contract costs estimated in the prior year.
For a selection of acquisition services contracts, we evaluated the appropriateness of the Entity’s estimated
total contract costs by performing the following:
• We inspected the executed contracts and interviewed the Entity’s project managers to obtain an
understanding of the contractual requirements and related performance obligations
• We evaluated the estimated purchased services, materials and labor costs by assessing progress to
date and the nature and complexity of work to be performed through interviewing the Entity’s project
managers, and inspecting corroborative evidence, if any, between the Entity and the suppliers and
subcontractors.
Other Information
Management is responsible for the other information. Other information comprises:
•
•
the information included in Management’s Discussion and Analysis filed with the relevant Canadian
Securities Commissions.
the information, other than the financial statements and the auditors’ report thereon, included in a
document likely to be entitled “2021 Annual Report”.
Our opinion on the financial statements does not cover the other information and we do not and will not
express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information
identified above and, in doing so, consider whether the other information is materially inconsistent with the
financial statements or our knowledge obtained in the audit and remain alert for indications that the other
information appears to be materially misstated.
We obtained the information included in Management’s Discussion and Analysis filed with the relevant
Canadian Securities Commissions as at the date of this auditors’ report. If, based on the work we have
performed on this other information, we conclude that there is a material misstatement of this other
information, we are required to report that fact in the auditors’ report.
We have nothing to report in this regard.
The information, other than the financial statements and the auditors’ report thereon, included in a
document likely to be entitled “2021 Annual Report” is expected to be made available to us after the date of
this auditors’ report. If, based on the work we will perform on this other information, we conclude that there
is a material misstatement of this other information, we are required to report that fact to those charged
with governance.
Responsibilities of Management and Those Charged with Governance for the
Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in
accordance with International Financial Reporting Standards (IFRS), and for such internal control as
management determines is necessary to enable the preparation of financial statements that are free from
material misstatement, whether due to fraud or error.
28
Independent Auditors’ Report
In preparing the financial statements, management is responsible for assessing the Entity’s ability to
continue as a going concern, disclosing as applicable, matters related to going concern and using the
going concern basis of accounting unless management either intends to liquidate the Entity or to cease
operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Entity’s financial reporting process.
Auditors’ Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are
free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes
our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted
in accordance with Canadian generally accepted auditing standards will always detect a material
misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of the
financial statements.
As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise
professional judgment and maintain professional skepticism throughout the audit.
We also:
•
•
•
•
•
•
Identify and assess the risks of material misstatement of the financial statements, whether due to fraud
or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that
is sufficient and appropriate to provide a basis for our opinion.
The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting
from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Entity’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Entity’s ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report
to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify
our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’
report. However, future events or conditions may cause the Entity to cease to continue as a going
concern.
Evaluate the overall presentation, structure and content of the financial statements, including the
disclosures, and whether the financial statements represent the underlying transactions and events in
a manner that achieves fair presentation.
Communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies in
internal control that we identify during our audit.
29
•
•
•
Provide those charged with governance with a statement that we have complied with relevant ethical
requirements regarding independence, and communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the group Entity to express an opinion on the financial statements. We
are responsible for the direction, supervision and performance of the group audit. We remain solely
responsible for our audit opinion.
Determine, from the other matters communicated with those charged with governance, those
matters that were of most significance in the audit of the financial statements of the current period
and are therefore the key audit matters. We describe these matters in our auditors’ report unless law
or regulation precludes public disclosure about the matter or when, in extremely rare circumstances,
we determine that a matter should not be communicated in our auditors’ report because the adverse
consequences of doing so would reasonably be expected to outweigh the public interest benefits of
such communication.
The engagement partner on the audit resulting in this auditors’ report is Andrew Watson.
Ottawa, Canada
March 31, 2022
30
Consolidated Financial Statements
CONSOLIDATED BALANCE SHEETS
(In thousands of United States dollars)
Assets
Current assets:
Cash
Amounts receivable (Note 18)
Unbilled revenue (Note 11)
Prepaid expenses
Prepaid expenses
Property and equipment (Note 5)
Intangible assets (Note 6)
Right of use assets (Note 7)
Investment (Note 8)
Total assets
Liabilities and Shareholders' (Deficiency) Equity
Current liabilities:
Accounts payable and accrued liabilities (Note 9)
Current portion of government loans (Note 10(b))
Lease obligations (Note 11)
Unearned revenue (Note 12)
Income taxes payable
Long-term project financing (Note 10(a))
Long-term government loans (Note 10(b))
Lease obligations (Note 11)
Total liabilities
Shareholders' equity:
Share capital (Note 15(a))
Warrants
Accumulated other comprehensive loss
Contributed surplus (Note 15(b))
Deficit
Total shareholders' equity
Going concern (Note 2(a))
Subsequent event (Note 22)
December 31,
2021
December 31,
2020
$
188
914
679
472
2,253
$
1,778
579
47
769
3,173
39
2,480
1,117
497
1,062
7,448
$
41
2,731
921
778
-
7,644
$
$
3,656
9
251
1,721
4
5,641
$
3,102
4
271
1,607
5
4,989
188
477
290
6,596
206,102
232
(129)
26,144
(231,497)
852
188
460
521
6,158
203,642
93
(115)
26,007
(228,141)
1,486
Total liabilities and shareholders' equity
$
7,448
$
7,644
See accompanying notes to consolidated financial statements.
On behalf of the Board:
(Signed) Patrick A. Blott
Patrick A. Blott
Chairman and CEO
On behalf of the Board:
(Signed) Phillippe Frappier
Phillippe Frappier
Independent Director
CONSOLIDATED STATEMENTS OF (LOSS) INCOME AND OTHER COMPREHENSIVE
(LOSS) INCOME
(In thousands of United States dollars, except per share information)
For the years ended December 31,
2021
2020
31
Revenue (Note 12)
Expenses:
Operating costs (Note 13(a))
Restructuring costs (Note 13(b))
Depreciation of property and equipment (Note 4)
Amortization of intangible assets (Note 5)
Depreciation of right of use assets (Note 6)
Gain on disposal of equipment (Note 4)
Operating loss
Gain on fair vale of investment (Note 8)
Gain on modification of debt (Note 10(a))
Government grants (Note 13)
Financing costs (Note 12(c))
Financing income
Loss on foreign currency translation
(Loss) income before income taxes
Income tax expense:
Current
(Loss) income for the period
Other comprehensive (loss) income:
Items that are or may be reclassified
subsequently to profit or loss:
Foreign currency translation differences
$
5,799
$
4,720
9,280
238
1,375
71
316
(6)
11,274
(5,475)
1,062
-
1,135
(61)
3
(2)
(3,338)
(18)
(18)
8,432
-
1,094
-
399
(150)
9,775
(5,055)
-
32,138
904
(1,338)
-
(96)
26,553
(21)
(21)
$
(3,356)
$
26,532
(14)
39
Comprehensive (loss) income for the period
$
(3,370)
$
26,571
Basic (loss) income earnings per share
Diluted (loss) income earnings per share
Weighted average number of Class A common
shares - basic (Note 15(c))
shares - diluted (Note 15(c))
See accompanying notes to consolidated financial statements.
$
$
(0.12)
(0.12)
$
$
1.35
1.29
27,039,139
27,039,139
19,481,498
20,518,988
2021 Annual Report | Consolidated Financial Statements
32
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ (DEFICIENCY)
EQUITY
(In thousands of United States dollars)
Share Capital Warrants
Contributed
Surplus
Accumulated
Other
Comprehensive
(Loss) Income
Deficit
Total
Balance at December 31, 2019
$
199,532
$
385
$
25,527
$
(154)
$
(254,673)
$
(29,383)
Comprehensive (loss) income for the period
Share-based compensation
RSU conversion
Expiration of warrants
Private placement proceeds (Note 15(a))
Issuance costs
Shares issued as compensation (Note 15(b))
-
-
9
-
4,659
(601)
43
-
-
-
(385)
-
93
-
-
104
(9)
385
-
-
-
39
-
-
-
-
-
-
26,532
-
-
-
-
-
-
26,571
104
-
-
4,659
(508)
43
Balance at December 31, 2020
$
203,642
$
93
$
26,007
$
(115)
$
(228,141)
$
1,486
Comprehensive loss for the period
Share-based compensation
Private placement proceeds (Note 1(a))
Issuance costs
RSU conversion
-
$
-
2,976
(525)
9
-
$
-
-
139
-
-
$
146
-
-
(9)
(14)
$
-
-
-
-
$
(3,356)
-
-
-
-
(3,370)
146
2,976
(386)
-
Balance at December 31, 2021
$
206,102
$
232
$
26,144
$
(129)
$
(231,497)
$
852
See accompanying notes to consolidated financial statements.
2021 Annual Report | Consolidated Financial Statements
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands of United States dollars)
For the years ended December 31,
2021
2020
33
Operating activities:
Net (loss) income for the period
Interest paid
Income tax paid
Adjustments for:
Gain on fair value of investment
Gain on modification of debt
Depreciation of property and equipment
Amortization of intangible assets
Depreciation of right of use assets
Share-based compensation expense
Gain on disposal of equipment
Financing costs
Current income tax expense
Changes in working capital:
Amounts receivable
Unbilled revenue and prepaid expenses
Accounts payable and accrued liabilities
Unearned revenue
(Gain) loss on foreign currency translation
Cash flows used in operating activities
Investing activities:
Purchase of property and equipment
Additions to intangible assets
Proceeds from sale of property and equipment
Cash flows used in investing activities
Financing activities:
Proceeds from private placement
Issuance costs
Payment of lease obligations
Proceeds from government loans
Repayment of government loans
Repayment of project financing
Repayment of notes payable
Cash flows provided by financing activities
Effect of foreign exchange on cash
(Decrease) increase in cash
Cash, beginning of period
Cash, end of period
See accompanying notes to consolidated financial statements.
$
(3,356)
(25)
(19)
$
26,532
(30)
(16)
(1,062)
-
1,375
71
316
146
(6)
61
18
(337)
(295)
538
114
(32)
(2,493)
(1,124)
(267)
6
(1,385)
2,976
(386)
(317)
-
(4)
-
-
2,269
19
(1,590)
1,778
-
(32,138)
1,094
-
399
104
(150)
1,338
21
147
314
(21)
333
25
(2,048)
(192)
(296)
150
(338)
4,659
(508)
(478)
535
-
(300)
(1,000)
2,908
26
548
1,230
$
188
$
1,778
2021 Annual Report | Consolidated Financial Statements
34
Notes to Consolidated Financial Statements
(In thousands of United States dollars, except per share information)
1. Reporting entity:
Intermap Technologies ® Corporation (the Company) is incorporated under the laws of Alberta, Canada.
The head office of Intermap is located at 8310 South Valley Highway, Suite 240, Englewood, Colorado, USA
80112. Its registered office is located at 400, 3rd Avenue SW, Suite 3700, Calgary, Alberta, Canada T2P 4H2.
Intermap is a global location-based geospatial intelligence company, creating a wide variety of geospatial
solutions and analytics for its customers. Intermap’s geospatial solutions and analytics can be used in
a wide range of applications including, but not limited to, location-based information, geospatial risk
assessment, geographic information systems, engineering, utilities, global positioning systems maps, oil
and gas, renewable energy, hydrology, environmental planning, wireless communications, transportation,
advertising, and 3D visualization.
2. Basis of preparation:
a. Going concern:
These consolidated financial statements have been prepared assuming the Company will continue
as a going concern. The going concern basis of presentation assumes the Company will continue
in operation for the foreseeable future and can realize its assets and discharge its liabilities and
commitments in the normal course of business. During the year ended December 31, 2021, the
Company reported an operating loss of $5,475, net loss of $3,356, and negative cash flows from
operating activities of $2,493. In addition, the Company has a shareholders’ equity of $852 and
negative working capital of $3,388 at December 31, 2021.
The above factors may be exacerbated by the ongoing COVID-19 pandemic and in the aggregate
indicate there are material uncertainties which may cast significant doubt about the Company’s
ability to continue as a going concern. In response to the COVID-19 pandemic the Company has taken
actions to adapt to the current environment using teleconference platforms for trainings, customer
meetings and conferences, and to manage liquidity by participating in various government support
programs, where applicable, including wage subsidies, tax payment deferrals and favorable credit
facilities. The Company’s ability to continue as a going concern is dependent on management’s ability
to successfully secure sales with upfront payments, and / or obtain additional financing. Failure to
achieve one or more of these requirements could have a materially adverse effect on the Company’s
financial condition and / or results of operations. The Board of Directors and management continue to
take actions to address these issues including raising capital through a private placement, exploring
options for additional capital and the announcement of contract wins to be recognized over the next
twelve months. Subsequent to yearend, the Company issued 4,008,288 Common shares under private
placement, raising gross proceeds of C$2,044 (see Note 22).
The consolidated financial statements do not reflect adjustments that would be necessary if the going
concern assumption was not appropriate. If the going concern basis was not appropriate for these
consolidated financial statements, then adjustments would be necessary to the carrying value of assets
and liabilities, the reported revenues and expenses, and the balance sheet classifications used.
b. Statement of compliance:
These consolidated financial statements have been prepared in accordance with International Financial
Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB). The
significant accounting policies are summarized in Note 3.
The policies applied in these consolidated financial statements are based on IFRS issued and effective
as of March 31, 2022, the date the Board of Directors approved the consolidated financial statements.
c. Measurement basis:
The consolidated financial statements have been prepared mainly on the historical cost basis. Other
measurement bases used are described in the applicable notes.
35
d. Use of estimates:
Preparing consolidated financial statements in conformity with IFRS requires management to make
judgments, estimates and assumptions that affect the application of accounting policies and reported
amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the
consolidated financial statements, and the reported amounts of revenue and expenses during the
period. Actual results could differ from these estimates.
The continuing uncertainty around the COVID-19 pandemic required the use of judgments and
estimates in the preparation of the consolidated financial statements for the year ended December
31, 2021. The future impact of COVID-19 uncertainties could generate, in future reporting periods, a
significant impact to the reported amounts of assets, liabilities, revenue and expenses in these and
any future consolidated financial statements. Examples of accounting estimates and judgments that
may be impacted by the pandemic include, but are not limited to revenue recognition, impairment of
property and equipment and intangible assets, and allowance for expected credit losses.
Estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting
estimates are recognized in the period in which the estimates are reviewed and in any future periods
affected.
Information about assumptions and estimation uncertainties that have a significant risk of resulting in
a material adjustment within the next financial year include the following:
i. Depreciation and amortization rates:
In calculating the depreciation and amortization expense, management is required to make
estimates of the expected useful lives of property and equipment.
ii. Trade receivables:
The Company uses historical trends and performs specific account assessments when
determining the expected credit losses. These accounting estimates are in respect to the trade
receivables line item in the Company’s consolidated balance sheet. At December 31, 2021, trade
receivables represented 12% of total assets.
The estimate of the Company’s expected credit losses could change from period to period due to
the allowance being a function of the balance and composition of trade receivables.
iii.
Investments:
The valuation and accounting for investments requires the application of management estimates
and judgments with respect to the determination of appropriate valuation method applied at
each reporting date. The assumptions for estimating fair value of investments are disclosed in
Note 8.
iv. Share-based compensation:
The Company uses the Black-Scholes option-pricing model to determine the grant date fair value
of share-based compensation. The following assumptions are used in the model: dividend yield;
expected volatility; risk-free interest rate; expected option life; and fair value.
Changes to assumptions used to determine the grant date fair value of share-based compensation
awards can affect the amounts recognized in the consolidated financial statements.
v. Government loans:
The Company has received a loan with no stated interest obligation. The valuation and accounting
for the zero-interest loan requires the application of management estimates and judgments with
respect to the determination of appropriate valuation method applied on initial recognition. The
assumptions for estimating fair value of the loan are disclosed in Note 10(b).
2021 Annual Report | Consolidated Financial Statements 36
vi. Revenue:
Revenue from acquisition service contracts, which are fixed-price contracts, is recognized over
time based on the ratio of costs incurred to estimated total contract costs. The determination
of estimated total contract costs of acquisition services contracts requires the use of significant
assumptions related to estimated purchased services, materials, and labor costs. Changes to the
assumptions used to measure revenue could impact the amount of revenue recognized in the
consolidated financial statements (see Note 3(k)).
vii. Impairment:
The carrying value of long-lived assets are reviewed for impairment whenever events or changes
in circumstances indicate that their carrying amounts may not be recoverable and assesses the
impairment for intangible assets not yet available for use on an annual basis. The Company has
determined that its long-lived assets belong to two distinct cash-generating units (“CGUs”). The
Company determines the value in use based on estimated discounted future cash flows and an
impairment is recognized if the carrying value exceeds that estimate. The significant assumptions
used in determining estimated discounted future cash flows include projected revenues and
discount rates. Judgment is required in determining the level at which to test impairment,
including the grouping of CGUs that generate cash inflows (see Note 3(j)).
e. Functional and presentation currency:
These consolidated financial statements are presented in United States dollars, which is the Company’s
functional currency. All financial information presented in United States dollars has been rounded to
the nearest thousand.
f.
Foreign currency translation:
Items included in the financial statements of each of the Company’s subsidiaries are measured using
the currency of the primary economic environment in which the entity operates (the functional
currency). Foreign currency transactions are translated into the functional currency using the exchange
rates prevailing at the dates of the transaction. Foreign exchange gains and losses resulting from
the settlement of such transactions and from the translation of monetary assets and liabilities not
denominated in the functional currency of an entity are recognized in net loss for the period.
Assets and liabilities of entities with functional currencies other than United States dollars are
translated at the period end rates of exchange, and the results of their operations are translated
at exchange rates prevailing at the dates of transactions. The resulting translation adjustments are
included in accumulated other comprehensive income in shareholders’ deficiency.
3. Summary of significant accounting policies:
a. Consolidation:
The accompanying consolidated financial statements include the accounts of the Company and
its wholly owned subsidiaries, Intermap Technologies Inc. (a U.S. corporation); Intermap Insurance
Solutions Inc. (a U.S. corporation), Intermap Technologies PTY Ltd (an Australian corporation); Intermap
Technologies s.r.o. (a Czech Republic corporation); and PT ExsaMap Asia (an Indonesian corporation).
Inter-company balances and transactions, and any unrealized income and expenses arising from intra-
group transactions, are eliminated in preparing the consolidated financial statements. The accounting
policies of all subsidiaries are consistent with the Company’s policies.
b. Cash:
Cash includes unrestricted cash balances.
2021 Annual Report | Consolidated Financial Statements 37
c. Property and equipment:
Property and equipment are measured at cost less accumulated depreciation. Cost includes
expenditures that are directly attributable to the acquisition of the asset. The cost of aircraft overhauls
is capitalized and depreciated over the period until the next overhaul. When parts of an item of
property and equipment have different useful lives, they are accounted for as separate items.
Depreciation is calculated over the depreciable amount, which is the cost of an asset, less its residual
value. Depreciation is provided on the straight-line basis over the following useful lives of the assets:
Assets
Aircraft
Aircraft engines
Mapping equipment - hardware and software
Radar equipment
Furniture and fixtures
Leasehold improvements
Lease obligations under finance leases
Depreciation methods, useful lives and residual values are reviewed at each financial year end and
adjusted, if appropriate.
Years
10
7
3
5
5
Shorter of useful life or term of lease
Financial liabilities at amortized cost
Assets under construction are not depreciated until available for use by the Company. Expenditures for
maintenance and repairs are expensed when incurred.
The cost of replacing an item of property and equipment is recognized in the carrying amount of
the item if it is probable that the future economic benefits embodied within the part will flow to
the Company, and its cost can be measured reliably. The carrying amount of the replaced part is
derecognized. The costs of the day-to-day servicing of property and equipment are recognized in profit
or loss as incurred.
Gains and losses on disposal of property and equipment are determined by comparing the proceeds
from disposal with the carrying amount and are recognized net of costs associated with the disposal
within other income in net loss for the period.
d.
Intangible assets:
Intangible assets include data library products the Company builds with the use of proprietary
software and intellectual property for use in software subscription sales and data license sales.
Intangible assets are measured at cost less accumulated amortization and they are amortized over a
straight-line basis of five years. The amortization method, estimate of the useful life, and residual values
of intangible assets are reviewed annually.
e. Research and development:
Research costs are expensed as incurred. Development costs are expensed in the year incurred unless
management believes a development project meets the specified criteria for deferral and amortization.
f.
Investments:
Investments include the common and preferred shares of a privately held company over which the
Company exercises no control or significant influence. The investments are carried at fair value, with
the change recognized in profit or loss.
g. Leases:
At inception of a contract, the Company assesses the right to control the use of an identified asset for
a period of time in exchange for consideration to determine if the contract is a lease. The Company
recognizes a right of use asset and a lease liability at the lease commencement date. The right of
use asset is initially measured based on the initial amount of the lease liability adjusted for any lease
payments made at or before the commencement date, plus any initial direct costs incurred and an
estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or
2021 Annual Report | Consolidated Financial Statements 38
the site on which it is located, less any lease incentives received. The asset is depreciated to the earlier
of the end of the useful life or the lease term using the straight-line method. The lease term includes
periods covered by an option to extend if the Company is reasonably certain to use that option. Lease
terms range from two to five years for offices and data facilities. The right of use asset is periodically
reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are not paid at
commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be
determined, the Company’s incremental borrowing rate. Variable lease payments that do not depend
on an index or rate are not included in the measurement of the lease liability. The lease liability is
measured at amortized cost using the effective interest method. It is remeasured when there is a
change in the future lease payments, if there is a change in the Company’s estimated amount expected
to be paid, or if the Company changes its assessment of if it will exercise a purchase, extension, or
termination option. When the lease liability is remeasured in this way, a corresponding adjustment
is made to the carrying amount of the right-of-use asset or is recorded in profit or loss if the carrying
amount of the right-of-use asset has been reduced to zero.
The Company has elected to apply the practical expedient not to recognize right of use assets and
lease liabilities for short-term leases that have a lease term of 12 months or less and leases of low-value
assets. The lease payments associated with these leases is recognized as an expense on a straight-line
basis over the lease term.
h. Provisions:
A provision is recognized, if as a result of a past event, the Company has a present legal or constructive
obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will
be required to settle the obligation. Provisions are determined by discounting the expected future cash
flows at a pre-tax rate that reflects the current market assessments of the time value of money and the
risks specific to the liability. The unwinding of the discount is recognized as finance cost.
i.
Restructuring:
A provision for restructuring is recognized when the Company has approved a detailed and formal
restructuring plan, and the restructuring either has commenced or has been announced publicly.
Future operating losses are not provided for.
ii. Onerous contracts:
A provision for onerous contracts is recognized when the expected benefits to be derived by the
Company from a contract are lower than the unavoidable cost of meeting its obligations under
the contract. The provision is measured at the present value of the lower of the expected cost
of terminating the contract and the expected net cost of continuing with the contract. Before a
provision is established, the Company recognizes any impairment loss on the assets associated
with the contract.
i.
Income taxes:
Income tax expense comprises current and deferred tax. Current tax and deferred tax are recognized in
profit or loss except to the extent that it relates to a business combination, or items recognized directly
in equity or in other comprehensive income.
Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using
tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in
respect of previous years.
Deferred tax is recognized in respect of temporary differences between the carrying amounts of
assets and liabilities for financial reporting purposes and the amounts used for taxation purposes.
Deferred tax is not recognized for the following temporary differences: the initial recognition of assets
or liabilities in a transaction that is not a business combination and that affects neither accounting
2021 Annual Report | Consolidated Financial Statements 39
nor taxable profit or loss, and differences relating to investments in subsidiaries and jointly controlled
entities to the extent that it is probable that they will not reverse in the foreseeable future. In addition,
deferred tax is not recognized for taxable temporary differences arising on the initial recognition
of goodwill. Deferred tax is measured at the tax rates that are expected to be applied to temporary
differences when they reverse, based on the laws that have been enacted or substantively enacted by
the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to
offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority
on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities
and assets on a net basis or their tax assets and liabilities will be realized simultaneously. A deferred
tax asset is recognized for unused tax losses, tax credits and deductible temporary differences, to the
extent that it is probable that future taxable profits will be available against which they can be utilized.
Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no
longer probable that the related tax benefit will be realized.
j.
Impairment:
The carrying values of all long-lived assets, including property and equipment, intangible assets, and
right of use assets are reviewed for impairment whenever events or changes in circumstances indicate
that their carrying amounts may not be recoverable. Intangible assets that are not yet available for
use are assessed annually regardless of whether there is an indication that the related assets may
be impaired. In testing for impairment, the recoverable amount of the CGU is estimated in order to
determine the extent of the impairment loss, if any.
The recoverable amount of an asset or cash generating unit is the greater of its value in use and its
fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to
their present value using a pre-tax discount rate that reflects current market assessments of the time
value of money and the risks specific to the asset. For impairment testing, assets that cannot be tested
individually are grouped together into the smallest group of assets that generates cash inflows from
continuing use that are largely independent of the cash inflows of other assets or groups of assets (the
cash-generating unit, or CGU).
An impairment loss is recorded when the recoverable amount of an asset or its CGU is less than its
carrying amounts. Impairment losses are evaluated for potential reversals when events or changes in
circumstances warrant such consideration.
k. Revenue recognition:
Revenue is recognized upon transfer of control of goods or services to the buyer in an amount that
reflects the consideration the Company expects to receive in exchange for those good or services.
The Company’s goods and services are generally distinct and accounted for as separate performance
obligations. Billings in excess of revenue are recorded as unearned revenue. Revenue recognized in
excess of billings is recorded as unbilled revenue.
The company recognizes an asset related to the incremental costs of obtaining a contract with a
customer. The Company has elected to make use of the practical expedient and will expense sales
commission costs when incurred if the amortization period is less than 12 months.
i. Data licenses:
Revenue from the sale of data licenses in the ordinary course of business is measured at the fair
value of the consideration received or receivable. Customers obtain control of data products
upon receipt of a physical hard drive or download of the data from a web link provided. Invoices
are generated, and revenue is recognized when control is transferred. Invoices are generally paid
within 30 days.
ii. Software subscriptions:
Software subscriptions are generally at least one year, with invoices issued and paid at the
beginning of the license term. Revenue is recognized over time, and payments for future months
2021 Annual Report | Consolidated Financial Statements 40
of service are recognized in unearned revenue. While the license agreements are for a fixed term,
some agreements also contain a limited number of clicks or uses. If the limit is reached prior to the
end of the term, the license ends early.
iii. Fixed-price contracts:
Revenue from acquisition service contracts is recognized over time based on the ratio of costs
incurred to estimated total contract costs. Provisions for estimated losses, if any, are recognized
in the period in which the loss is determined. Contract losses are measured in the amount by
which the estimated costs of the related project exceed the estimated total revenue for the
project. Invoices are issued according to contractual terms and are usually payable within 30 days.
Revenue recognized in excess of billings is recorded as unbilled revenue.
iv. Multiple performance obligations:
When a single sales transaction requires more than one performance obligation, the total amount
of consideration to be received is allocated to distinct products or services deliverables based on
the stand-alone selling price of each.
l.
Share-based compensation:
The grant date fair value of equity-settled share-based payment awards granted to employees is
recognized as an employee expense, with a corresponding increase in equity, over the period the
employees unconditionally become entitled to the awards. The amount recognized as an expense
is adjusted to reflect the number of awards for which the related service and non-market vesting
conditions are expected to be met, such that the amount ultimately recognized as an expense is based
on the number of awards that do meet the related service and non-market performance conditions
at the vesting date. For share-based payment awards with non-vesting conditions, the grant date fair
value of the share-based payment is measured to reflect such conditions and there is no true-up for
differences between expected and actual outcomes.
Share-based payment arrangements in which the Company receives goods or services as consideration
for its own equity instruments are accounted for as equity-settled share-based payment transactions,
regardless of how the equity instruments are obtained by the Company.
m. Earnings per share:
The basic earnings per share is computed by dividing net earnings (loss) by the weighted average
number of common shares outstanding during the reporting period. Diluted earnings per share is
computed similar to basic earnings per share, except the weighted average number of common shares
outstanding are increased to include additional shares from the assumed exercise of share options and
warrants, if dilutive.
n. Financial instruments:
i.
Initial measurement and classification:
Non-derivative financial assets: The Company initially recognizes trade receivables on the date
that they are originated. All other financial assets are recognized initially on the date at which
the Company becomes a party to the contractual provisions of the instrument. The Company
determines the classification of its financial assets on the basis of both the business model for
managing financial assets and the contractual cash flow characteristics of the financial assets.
Financial assets are not reclassified subsequent to their initial recognition unless the Company
changes its business model for managing financial assets.
Assets at amortized cost: Trade receivables are financial assets with fixed or determinable
payments that are not quoted in an active market. Such assets are recognized initially at fair value
plus any directly attributable transaction costs. A financial asset is measured at amortized cost if it
is held within a business model whose objective is to hold assets to collect contractual cash flows
2021 Annual Report | Consolidated Financial Statements 41
and its contractual terms give rise on specified dates to cash flows that are solely payments of
principal and interest on the principal amount outstanding.
Financial assets at fair value through profit and loss: Equity investments that are held for trading
are classified at FVTPL.
Financial liabilities at amortized cost: The Company initially recognizes debt liabilities on the date
that they are originated. All other financial liabilities are recognized initially on the date at which
the Company becomes a party to the contractual provisions of the instrument.
ii. Subsequent measurement:
Non-derivative financial assets: The Company derecognizes a financial asset when the contractual
rights to the cash flows from the asset expire, or it transfers the rights to receive the contractual
cash flows on the financial asset in a transaction in which substantially all the risks and rewards of
ownership of the financial asset are transferred. Any interest in transferred financial assets that is
created or retained by the Company is recognized as a separate asset or liability.
Financial assets and liabilities are offset, and the net amount presented in the consolidated
balance sheet when, and only when, the Company has a legal right to offset the amounts and
intends either to settle on a net basis or to realize the asset and settle the liability simultaneously.
Assets at amortized cost: Subsequent to initial recognition, trade receivables are measured at
amortized cost using the effective interest method, less any impairment losses.
Financial assets at fair value through profit and loss: Equity investments are measured at fair
value. Net changes in the fair value are recognized in profit and loss.
Financial liabilities at amortized cost: The Company derecognizes a financial liability when its
contractual obligations are discharged, cancelled or expire.
Such financial liabilities are recognized initially at fair value plus any directly attributable
transaction costs. Subsequent to initial recognition, these financial liabilities are measured at
amortized cost using the effective interest method.
The following is a summary of the classification the Company has applied to each of its significant
categories of financial instruments outstanding:
iii. Fair value measurement:
Financial instruments recorded at fair value on the Consolidated Balance Sheet are classified using
a fair value hierarchy that reflects the significance of the inputs used in making the measurements.
The fair value hierarchy has the following levels:
Level 1 – valuations based on quoted prices (unadjusted) in active markets for identical assets or
liabilities;
Level 2 – valuation techniques based on inputs other than quoted prices included in Level 1 that
are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from
prices);
Level 3 – valuation techniques using inputs for the asset or liability that are not based on
observable market data (unobservable inputs).
During the reporting periods, there were no transfers between Level 1 and Level 2 fair value
measurements.
2021 Annual Report | Consolidated Financial Statements 42
Financial instrument:
Cash
Amounts receivable
Investments
Classification:
Assets at amortized cost
Assets at amortized cost
Financial assets at fair vaule
through profit and loss
Accounts payable and accrued liabilities
Long-term project financing
Long-term government loans
Lease obligations under finance leases
Financial liabilities at amortized cost
Financial liabilities at amortized cost
Financial liabilities at amortized cost
Financial liabilities at amortized cost
iv.
Impairment of financial assets:
Loss allowances are measured based on the lifetime expected credit losses (ECLs). When
determining whether the credit risk of a financial asset has increased significantly since initial
recognition and then estimating ECLs, the Company considers reasonable and supportable
information that is relevant and available without undue cost or effort. This includes both
quantitative and qualitative information and analysis, based on historical experience and forward-
looking information. The Company considers a financial asset to be in default when the customer
is highly unlikely to pay its obligation in full and then impairs the asset.
o. Segments:
The operations of the Company are in one industry segment: digital mapping and related services.
p. Share capital:
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary
shares are recognized as a deduction from equity, net of any tax effects.
q. Government grants:
Government grants are recognized at fair value once there is reasonable assurance that the
Company will comply with the conditions attached to the grants and that the grants will be received.
Government grants are recognized in profit or loss on a systematic basis over the periods in which the
Company recognizes the costs for which the grants are intended to compensate. A forgivable loan
from the government is treated as a government grant when there is reasonable assurance that the
entity will meet the terms for forgiveness of the loan.
4. New and revised IFRS accounting pronouncements:
The IASB and International Financial Reporting Interpretations Committee (IFRIC) issued the following
standards that have not been applied in preparing these consolidated financial statements, as their
effective dates fall within annual periods beginning after the current reporting period.
a. Amendments to IAS 1 – Classification of Liabilities as current or non-current
On January 23, 2020 the IASB issued amendments to IAS 1 – Presentation of financial statements,
providing a more general approach to the classifications of liabilities based on the contractual
agreements in place at the reporting date. The amendments apply to annual reporting periods
beginning on or after January 1, 2023. Early adoption is permitted.
b. Amendments to IAS 1 and IFRS Practice Statement 2 – Disclosure of accounting policies
On February 12, 2021 the IASB issued amendments to IAS 1 – Presentation of financial statements,
to assist entities in determining which accounting policies to disclose in the financial statements.
The amendments apply to annual reporting periods beginning on or after January 1, 2023. The
amendments to IAS 1 require that an entity disclose its material accounting policies, instead of its
significant accounting policies.
2021 Annual Report | Consolidated Financial Statements 43
c. Amendments to IAS 8 – Definition of accounting estimates
On February 12, 2021 the IASB issued amendments to IAS 8 – Accounting Policies, Changes in
Accounting Estimates and Errors, to assist entities to distinguish between accounting policies and
accounting estimates. The amendments apply to annual periods beginning on or after January 1, 2023.
The amendments to IAS 8 replace the definition of a “change in accounting estimates” with a definition
of “accounting estimates”. Under the new definition, accounting estimates are “monetary amounts
in financial statements that are subject to measurement uncertainty”. Entities develop accounting
estimates if accounting policies require items in financial statements to be measured in a way that
involved measurement uncertainty. The amendments confirm that a change in an accounting estimate
that results from new information or new developments is not a correction of an error.
5. Property and equipment:
Aircraft
and
engines
Radar and
mapping
equipment
Furniture
and
fixtures
Leasehold
improvements
Under
construction
Total
Balance at December 31, 2019
$
290
$
2,132
$
7
$
54
$
1,151
$
3,634
Additions
Transfer from under construction
Depreciation
-
-
(103)
4
901
(943)
7
-
(3)
-
-
(45)
180
(901)
-
191
-
(1,094)
Balance at December 31, 2020
$
187
$
2,094
$
11
$
9
$
430
$
2,731
Additions
Transfer from under construction
Depreciation
257
185
(99)
503
455
(1,263)
1
-
(4)
-
-
(9)
363
(640)
-
1,124
-
(1,375)
Balance at December 31, 2021
$
530
$
1,789
$
8
$
-
$
153
$
2,480
Aircraft
and
engines
Radar and
mapping
equipment
Furniture
and
fixtures
Leasehold
improvements
Under
construction
Total
Cost
$
10,176
$
32,267
$
396
$
1,074
$
430
$
44,343
Accumulated depreciation
(9,989)
(30,173)
(385)
(1,065)
-
(41,612)
Balance at December 31, 2020
$
187
$
2,094
$
11
$
9
$
430
$
2,731
Cost
$
10,618
$
33,225
$
345
$
1,074
$
153
$
45,415
Accumulated depreciation
(10,088)
(31,436)
(337)
(1,074)
-
(42,935)
Balance at December 31, 2021
$
530
$
1,789
$
8
$
-
$
153
$
2,480
During the twelve months ended December 31, 2021, the Company disposed of assets with an original cost
of $54 (December 31, 2020 - $1,116), a net book value of $Nil (December 31, 2020 - $Nil), recognized a gain
of $6 (December 31, 2020 - $150) on those assets and received cash proceeds of $6 (December 31, 2020 -
$150).
2021 Annual Report | Consolidated Financial Statements
44
6.
Intangible assets:
Data library
not yet
available for
use
Data
library
Total
Balance at December 31, 2019
-$
$
625
$
625
Additions
Transfer
-
220
296
(220)
296
-
Balance at December 31, 2020
$
220
$
701
$
921
Additions
Transfer
Amortization
-
797
(71)
267
(797)
-
267
-
(71)
Balance at December 31, 2021
$
946
$
171
$
1,117
Data library
not yet
available for
use
Data
library
Total
Cost
$
220
$
701
$
921
Accumulated amortization
-
-
-
Balance at December 31, 2020
$
220
$
701
$
921
Cost
1,017
171
1,188
Accumulated amortization
(71)
-
(71)
Balance at December 31, 2021
$
946
$
171
$
1,117
7. Right of use assets:
Beginning Balance
Depreciation
New leases
Adjustment
Foreign Exchange
Ending Balance
December 31, December 31,
2020
2021
$
778
$
406
(316)
33
-
$
2
497
(399)
800
(29)
-
778
$
During the twelve months ended December 31, 2021, the Company extended the office facility lease in
Prague by one year. During the twelve months ended December 31, 2020, the Company executed new
lease agreements for all four office facilities, the equipment colocation facility, and two small equipment
leases.
8.
Investments
The Company has an equity investment in shares of a privately held company over which the Company
exercises no control or significant influence. The fair value of the equity investment at December 31,
2021 was estimated using a market-based approach with primarily unobservable inputs, including but
not limited to non-binding offers entertained by the investee. At December 31, 2021 the fair value was
estimated to be $1,062 (December 31, 2020 - $nil) and is a level 3 fair value measurement. For the year
ended December 31, 2021, $1,062 is recognized as a gain on fair value remeasurement of the investment. A
20% change in the estimated value of the investment would impact net income by approximately $212.
2021 Annual Report | Consolidated Financial Statements
9. Accounts payable and accrued liabilities:
December 31,
2021
December 31,
2020
45
Accounts payable
Accrued liablities
Other taxes payable
$
$
1,969
1,686
1
3,656
1,556
1,546
-
3,102
$
$
During the twelve months ended December 31, 2021, the Company reversed excess vendor payables of $53
(December 31, 2020 - $1) recorded in prior years based on IFRS 9 derecognition of financial liabilities as the
liabilities have expired.
10. Financial liabilities:
The following table provides a reconciliation of movements of liabilities to cash flows arising from financing
activities and balances at December 31, 2021 and 2020:
Balance at December 31, 2019
$
31,884
$
484
$
-
$
465
$
32,833
Notes
Payable
Project
Financing
Government
Loans
Lease
Obligations
(Note 11)
Total
Changes from financing activities:
Proceeds from government loans
Payment of lease obligations
Repayment of notes payable
Repayment of project financing
Total changes from financing activities
Foreign exchange
Other changes:
Financing costs
Interest paid
Gain on modification of debt
Discount on project financing (Note 14)
New leases (Note 7)
-
-
(1,000)
-
(1,000)
-
1,254
-
(32,138)
-
-
-
-
-
(300)
(300)
4
-
-
-
-
-
535
-
-
-
535
-
2
-
-
(73)
-
-
(478)
-
-
(478)
535
(478)
(1,000)
(300)
(1,243)
6
10
29
(30)
-
-
800
1,285
(30)
(32,138)
(73)
800
Balance at December 31, 2020
$
-
$
188
$
464
$
792
$
1,444
Changes from financing activities:
Payment of lease obligations
Repayment of government loans
Total changes from financing activities
Foreign exchange
Other changes:
Financing costs
Interest paid
New leases (Note 7)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(4)
(4)
3
26
(3)
-
(317)
-
(317)
(317)
(4)
(321)
21
24
32
(20)
33
58
(23)
33
Balance at December 31, 2021
$
-
$
188
$
486
$
541
$
1,215
a. Notes payable:
On June 3, 2020, the Company announced a settlement agreement with PenderFund Capital
Management Ltd. (Pender), the manager of the Vertex fund. Under the terms of the agreement, Vertex
and Pender extinguished the notes payable, and the parties provided for a general release from all
claims associated with the Vertex financings, following receipt of a $1,000 cash payment. On August
12, 2020, the Company paid $1,000 and all claims associated with the Vertex financings were released,
resulting in the gain on modification of $32,138.
2021 Annual Report | Consolidated Financial Statements
46
b. Project financing:
Reimbursable project development funds provided by a corporation designed to enable the
development and commercialization of geomatics solutions in Canada. The funding is repayable upon
the completion of a specific development project and the first sale of any of the resulting product(s).
Repayment is to be made in quarterly installments equal to the lesser of 20% of the funding amount
or 25% of the prior quarter’s sales. There were no sales of the related products during the years ended
December 31, 2021 and 2020.
c. Government loans:
SBA loan
Western Development Canada loan
Less current portion
December 31,
2021
December 31,
2020
$
154
332
$
152
312
486
(9)
464
(4)
Long-term portion of project financing
$
477
$
460
i.
SBA loan:
On July 17, 2020, the Company received a $150 long-term loan from the Small Business
Administration (SBA). Interest will accrue at the rate of 3.75% per annum and payments of $0.7
monthly began twelve months from the date the funds were received. The balance of principal
and interest will be payable thirty years from the date of the note.
ii. Western Development Canada loan:
On December 29, 2020, the Company received a $385 (C$494) long-term loan from Western
Economic Diversification in Canada. The loan will be repaid in 36 monthly installments starting in
January 2023. The loan is non-interest bearing, and therefore the fair value at inception must be
estimated to account for an imputed interest factor. The value at inception was determined to be
$312, based on the estimated discount rate of 6.07%, and is subject to estimation uncertainty. The
resulting discount of $73 was recognized in government grants at December 31, 2020 and will be
accreted through interest expense over the term of the loan using the effective interest method.
11. Lease obligations:
The following table presents the contractual undiscounted cash flows for lease obligations which require
the following payments for each period ending December 31:
2022
2023
2024
2025
$
$
282
170
64
61
577
Interest expense on lease obligations for the year ended December 31, 2021 was $32 (December 31, 2020
– $29). Total cash outflow for leases was $321 (December 31, 2020 – $478), and $316 (December 31, 2020 –
$369) for short-term and low-value operating leases for equipment and office spaces.
The Company also has contractual undiscounted cash flows for short-term and low-value operating leases
for equipment and maintenance that are not on the balance sheet which require the payments of $126 for
the twelve months ending December 31, 2022.
2021 Annual Report | Consolidated Financial Statements
12. Revenue:
Details of revenue are as follows:
For the twelve months ended December 31,
2021
2020
47
Acquisition services
Value-added data
Software and solutions
Primary geographical market
United States
Asia/Pacific
Europe
Timing of revenue recognition
Upon delivery
Services overtime
$
$
$
$
$
$
$
$
$
$
$
$
1,403
1,688
2,708
5,799
1,594
1,996
2,209
5,799
2,100
3,699
5,799
1,390
908
2,422
4,720
1,385
1,474
1,861
4,720
1,364
3,356
4,720
Changes in the unbilled revenue balance are as follows:
For the twelve months ended December 31,
2021
2020
Unbilled revenue, beginning of period
Increase in unbilled revenue recognized
Amounts invoiced included in the
beginning balance
Amounts invoiced in the current period
Foreign exchange
Unbilled revenue, end of period
$
47
1,775
$
410
1,446
(38)
(1,096)
(9)
679
$
(410)
(1,411)
12
47
$
Changes in the unearned revenue balance are as follows:
For the twelve months ended December 31,
2021
2020
Unearned revenue, beginning of period
Recognition of unearned revenue included in the
beginning balance
Recognition of unearned revenue in the current period
Amounts invoiced and revenue unearned
Foreign exchange
Unearned revenue, end of period
$
1,607
$
1,274
(1,025)
(956)
2,089
6
1,721
$
(966)
(781)
2,079
1
1,607
$
The Company recognizes an asset for the incremental costs of obtaining a contract with a customer if the
expected benefit of those costs is longer than one year. The Company determined that certain commissions
paid to sales employees meet the requirement to be capitalized. Total capitalized cost included in prepaid
expenses and other assets to obtain contracts at December 31, 2021 was $82 (2020 – $85).
2021 Annual Report | Consolidated Financial Statements
48
13. Operating and non-operating costs:
a. Operating costs:
For the twelve months ended December 31,
2021
2020
Personnel
Purchased services & materials (1)
Travel
Facilities and other expenses
2,268
91
576
8,432
(1) Purchased services and materials include aircraft costs, project costs, professional and consulting fees, and selling and
marketing costs.
$
5,603
$
5,497
2,932
86
659
9,280
$
$
b. Restructuring costs:
During the twelve months ended December 31, 2021, the Company incurred $238 in restructuring
costs related to a reduction in management required to support editing operations. (December 31,
2020 - $Nil).
c.
Financing costs:
For the twelve months ended December 31,
2021
2020
Accretion of discounts recognized on
notes payable
Interest on project financing
Interest on government loans
Interest on lease obligations
Interest on accounts payable
Discount on accounts receivable
-
$
-
26
32
3
-
$
61
$
1,254
2
-
29
26
27
1,338
$
14. Government grants:
The Company participated the following government assistance programs that were made available by
various government agencies during 2021 and 2020 to support COVID-19 relief:
Twelve months ended December 31,
2021
2020
Paycheck Protection Program
Canada Emergency Wage Subsidy
NRC IRAP Innovation Assistance Program
Employee Retention Credit
Western Development Canada discount
a. Paycheck Protection Program (PPP):
$
562
123
-
450
-
1,135
$
$
562
167
102
-
73
904
$
The Company received $562 under the first (2020) and second (2021) rounds of the Paycheck
Protection Program (PPP) in the United States. The PPP, established as part of the Coronavirus Aid,
Relief and Economic Security Act, provides for loans to qualifying businesses for amounts up to 2.5
times of the average monthly payroll expenses of the qualifying business. The loans and accrued
interest are forgivable after twenty-four weeks if the borrower uses the loan proceeds for eligible
purposes, including payroll, benefits, rent and utilities. The unforgiven portion of the PPP loan is
payable over two years at an interest rate of 1%, with a deferral of payments for the first six months.
The Company used the proceeds for purposes consistent with the PPP and $562 from the first round in
2020 has been forgiven. The Company applied for forgiveness on the second round.
2021 Annual Report | Consolidated Financial Statements
49
b. Canada Emergency Wage Subsidy (CEWS):
The Company was eligible for $149 (December 31, 2020 – $216) (reduced by $26 (December 31, 2020
– $49) for the portion of wages that were capitalized) under the CEWS program, to cover a portion of
employee wages, and is intended to help prevent future job losses and to ease the business back into
normal operations. The Company has received all the funds.
c. National Research Council Industrial Research Assistance Program Innovation Assistance
Program:
The Industrial Research Assistance Program provided a wage subsidy to eligible employers for up
to 12 weeks. The Company was eligible for $127 (reduced by $25 for the portion of wages that were
capitalized) for wages between April 1 and June 30, 2020.
d. Employee Retention Credit :
The Company was eligible for $494 (reduced by $44 for the portion of wages that were capitalized)
under the Employee Retention Credit (ERC) in the United States. The ERC is a refundable tax credit
against certain employment taxes equal to 50% (2020) or 70% (2021) of the qualified wages an eligible
employer pays to employees. For each employee, wages up to ten thousand can be counted to
determine the amount of the credit each quarter the Company meets the qualification criteria.
e. Western Development Canada discount (See Note 10(c)(ii))
15. Share capital:
a. Authorized:
The authorized share capital of the Company consists of an unlimited number of Class A common
shares and an unlimited number of Class A participating preferred shares. There are no Class A
participating preferred shares outstanding.
b.
Issued:
Class A common shares
Shares
Amount
Shares
Amount
December 31, 2021
Number of
December 31, 2020
Number of
Balance, beginning of period:
Private placement
Issuance costs
RSU conversion
Share-based compensation
Balance, end of period:
25,198,529
4,166,893
-
50,000
-
29,415,422
$
$
203,642
2,976
(525)
9
-
206,102
17,268,472
7,804,987
-
50,000
75,070
25,198,529
$
$
199,532
4,659
(601)
9
43
203,642
On April 27, 2021, the Company issued 613,005 Class A common shares at C$0.87 per share in
connection with a private placement. The Company received $434 in proceeds and recorded $73 in
issuance costs, of which $28 settled through warrants (see Note 16) and $45 was paid in cash.
On July 30, 2021, the Company issued 2,241,667 Class A common shares at C$0.90 per share in
connection with the first tranche of a private placement. The company received $1,605 in proceeds and
recorded $79 of issuance costs settled through warrants (see Note 16).
During August 2021, the Company issued 750,000 Class A common shares and 200,000 Class A
common shares at C$0.90 per share in connection with the second tranche of a private placement. The
Company received $680 in proceeds and recorded $29 in issuance costs settled through warrants (see
Note 16).
On August 11, 2021 50,000 restricted share units (RSUs) were converted to common shares that had a
value of $9 in contributed surplus that was reclassified to share capital (see Note 15(b) and (e)).
2021 Annual Report | Consolidated Financial Statements
50
On September 20, 2021, the Company issued 362,221 Class A common shares at C$0.90 per share in
connection with the third tranche of a private placement. The Company received $257 in proceeds and
recorded $3 in issuance costs settled through warrants (see Note 16). The Company also paid $341 in
cash relating to all three tranches during the third quarter of 2021.
On August 5, 2020, the Company issued 3,571,428 Class A common shares at C$0.56 per share in
connection with the first tranche of a private placement. On August 17, 2020, the Company issued
586,685 Class A common shares at C$0.56 per share as a second tranche of the private placement.
The Company received $1,779 in proceeds and recorded $300 in issuance costs, of which $93 settled
through warrants (see Note 16) and $207 was paid in cash, related to both tranches.
On October 6, 2020 50,000 restricted share units (RSUs) were converted to common shares that had a
value of $9 in contributed surplus that was reclassified to share capital (see Note 15(b) and (e)).
During November 2020, the Company issued 1,648,874 Class A common shares, 728,000 Class A
common shares, and 1,270,000 Class A common shares at C$1.03 per share in connection with the
third tranche of a private placement. The Company received $2,880 in proceeds and recorded $301 in
issuance costs.
On December 17, 2020, 75,070 Class A common shares were issued to a director of the Company
as compensation for services. Compensation expense of $43 for these Class A common shares was
included in operating costs.
c. Contributed surplus:
Balance, beginning of period
Share-based compensation
Expiration of warrants
Converted RSUs
Balance, end of period
d. Earnings (loss) per share:
December 31,
2021
December 31,
2020
$
26,007
146
-
(9)
$
25,527
104
385
(9)
$
26,144
$
26,007
The calculation of loss per share is based on the weighted average number of Class A common shares
outstanding. Where the impact of the exercise of options or warrants is anti-dilutive, they are not
included in the calculation of diluted loss per share.
For the twelve months ended December 31, 2021, there were no outstanding share options (December
31, 2020 – 881,944) and no outstanding warrants (December 31, 2020 – 159,002) that were included
in the diluted weighted average number of shares calculation as their effect was dilutive. There were
822,943 outstanding share options (December 31, 2020 – 45,381) and 413,843 outstanding warrants
(December 31, 2020 – Nil) that were excluded from the diluted weighted average number of shares
calculation as their effect would have been anti-dilutive.
The average market value of the Company’s shares for purposes of calculating the dilutive effect of the
share options and warrants was based on quoted market prices for the period during which the share
options and warrants were outstanding.
e. Share option plan:
The Company established a share option plan to provide long-term incentives to attract, motivate, and
retain certain key employees, officers, directors, and consultants providing services to the Company.
The plan permitted granting options to purchase up to 10% of the outstanding Class A common shares
of the Company. The share option plan was replaced at the Annual General Meeting on March 15, 2018
(see Note 15(e)), and all options issued and outstanding at that time will remain until such time they
are exercised, expired, or forfeited. As of December 31, 2021, 822,943 share options are issued and
outstanding. No additional options will be issued under this plan.
2021 Annual Report | Consolidated Financial Statements
51
The following tables summarize information regarding share options outstanding:
December 31, 2021
December 31, 2020
Number of
shares
under option
Weighted
average
exercise
price (CDN)
Number of
shares
under option
Weighted
average
exercise
price (CDN)
895,325
(72,382)
$
0.81
1.25
1,180,575
(285,250)
$
0.89
1.16
Options outstanding,
beginning of period
Expired
Options outstanding, end of period
822,943
$
0.77
895,325
$
0.81
Options exercisable, end of period
822,943
$
0.77
895,325
$
0.81
Exercise
Price
(CDN$)
0.70
0.80
2.70
Options
outstanding
631,011
170,932
21,000
822,943
Weighted average
remaining
contractual life
5.28 years
4.88 years
0.38 years
5.07 years
Options
exercisable
631,011
170,932
21,000
822,943
During the twelve months ended December 31, 2021, the Company recognized $Nil (twelve months
ended December 31, 2020 – $8) of non-cash compensation expense related to the share option plan.
f. Omnibus plan:
The omnibus plan was approved by the shareholders at the Annual General Meeting on March 15,
2018 and replaces the share option plan, the employee share compensation plan and the director’s
share compensation plan, which provided for shares to be issued to employees and directors as
compensation for services. The omnibus plan permits the issuance of options, stock appreciation
rights, restricted share units and other share-based awards under one single plan.
The maximum number of common shares reserved under the omnibus plan was 3,363,631. Any
common shares reserved under the predecessor share option plan related to awards that expire
or forfeit will be rolled into the omnibus plan. At the Annual General Meeting on June 29, 2021,
shareholders approved replenishment of 997,253 Common Shares reserved for issuance under the
Omnibus Incentive Plan, for a total reserve of 4,360,884. As of December 31, 2021, 822,943 share
options (2020 – 895,325) and 1,330,884 RSUs (2020 – 1,224,126) are issued and outstanding. In
addition, 872,183 Class A common shares were issued during 2018, 125,070 Class A common shares
were issued during 2020, and 50,000 shares were issued during 2021 (see Note 15(b)) under the plan,
leaving 1,159,804 awards remain available for future issuance.
The following table summarizes information regarding RSUs outstanding:
RSUs outstanding, beginning of period
Issued
Converted to common shares
Forfeitures
December 31,
2021
Number of
RSUs
December 31,
2020
Number of
RSUs
1,224,126
188,159
(50,000)
(31,401)
1,050,400
325,061
(50,000)
(101,335)
RSUs outstanding, end of period
1,330,884
1,224,126
During the twelve months ended December 31, 2021, 188,159 RSUs (twelve months ended December
31, 2020 – 325,061) were issued at a weighted average grant date fair value of C$0.91 per share (twelve
months ended December 31, 2020 – C$0.73 per share). During the twelve months ended December
31, 2021, the Company recognized $146 (twelve months ended December 31, 2020 – $96) of non-cash
compensation expense related to the RSUs.
2021 Annual Report | Consolidated Financial Statements
52
g. Share-based compensation expense:
Non-cash compensation expense has been included in operating costs with respect to the share
options, RSUs and shares granted to employees and non-employees as follows:
For the twelve months ended December 31,
Employees
Directors and advisors
Non-cash compensation
2021
2020
$
73
73
$
65
39
$
146
$
104
16. Class A common share purchase warrants:
The following table details the number of Class A common share purchase warrants outstanding at each
balance sheet date:
Grant Date Expiry Date
Exercise
Price
Granted
Number of
Warrants
Outstanding
December
31, 2020
8/5/2020
8/17/2020
4/27/2021
7/30/2021
8/9/2021
8/18/2021
9/20/2021
7/31/2022 US$ 0.42
8/14/2022 US$ 0.42
4/27/2023 US$ 0.73
7/29/2023 US$ 0.80
8/8/2023 US$ 0.80
8/17/2023 US$ 0.88
9/19/2023 US$ 0.87
139,284
19,718
60,000
131,166
45,000
12,000
6,666
139,284
19,718
-
-
-
-
-
Number of
Warrants
Outstanding
December
31, 2021
139,284
19,718
60,000
131,166
45,000
12,000
6,666
Issued
-
-
60,000
131,166
45,000
12,000
6,666
Each warrant entitles its holder to purchase one Class A common share.
413,834
159,002
254,832
413,834
17. Income Taxes:
a. Current tax expense:
December 31,
Current period
b. Reconciliation of effective tax rate:
2021
2020
$
(18)
$
(21)
$
(18)
$
(21)
Income tax expense varies from the amount that would be computed by applying the basic federal
and provincial income tax rates to the net income (losses) before taxes as follows:
December 31,
Net Income (Losses), excluding income tax
Tax rate
2021
2020
$
(3,338)
$
26,553
-25.0%
24.0%
Expected Canadian income tax recovery (expense)
$
833
$
(6,373)
Decrease resulting from:
Change in unrecognized temporary differences
Difference between Canadian statutory rate and those
applicable to U.S. and other foreign subsidiaries
Non-deductible expenses and non-taxable income
Adjustment for prior years income tax matters
Expiry of tax losses
Other
229
6,916
(7)
207
(1,230)
-
(50)
(18)
$
41
156
(96)
(693)
28
(21)
$
2021 Annual Report | Consolidated Financial Statements
53
c. Recognized deferred tax assets and liabilities:
Deferred income taxes reflect the impact of temporary differences between amounts of assets and
liabilities for financial reporting purposes and such amounts as measured by tax laws. Deferred tax
assets and liabilities recognized at December 31, 2021 and 2020, are as follows:
Assets
Liabilities
Net
December 31,
Property and equipment
Intangible assets
Note payable
Tax loss carryforwards
Tax (assets) liabilities
Set off of tax
Net tax (assets) liabilities
2021
2020
2021
$
-
-
-
(608)
$
-
-
-
(374)
$
487
113
8
2020
.
$
136
227
11
2021
2020
$
487
113
8
(608)
$
136
227
11
(374)
-
-
$
(608)
$
(374)
$
608
$
374
$
-
608
$
-
374
$
-
(608)
$
-
(374)
$
-
-
$
-
$
-
-
$
-
d. Unrecognized deferred tax assets:
Deferred tax assets have not been recognized in respect of the following items:
December 31,
Deductible temporary differences
Tax loss carryforwards
2021
2020
$
21,247
192,299
$
21,184
191,080
$
213,546
$
212,264
The deferred tax asset is recognized when it is probable that future taxable profit will be available to
utilize the benefits. The Company has not recognized deferred tax assets with respect to these items
due to the uncertainty of future Company earnings.
Loss carry forwards:
At December 31, 2021, approximately $195,358 of loss carry forwards and $2,405 of tax credits were
available in various jurisdictions. At December 31, 2021, $3,060 of loss carry forwards were recognized
as a deferred tax asset. A summary of losses by year of expiry are as follows:
2022
2023-2040
Indefinite
$
1,190
183,340
10,828
195,358
$
e. Movement in deferred tax balances during the year:
Balance at
December 31, 2020
Recognized in
Profit and Loss
Recognized
in Equity
Balance at
December 31, 2021
Property and equipment
Intangible assets
Note payable
Tax loss carryforwards
$
136
227
11
(374)
$
351
(114)
(3)
(234)
-
$
-
-
-
$
487
113
8
(608)
Net tax (assets) liabilities
$
-
$
-
$
-
$
-
2021 Annual Report | Consolidated Financial Statements
54
18. Segmented information:
The operations of the Company are in one industry segment: digital mapping and related services. Revenue
by geographic segment is included in Note 12.
Property and equipment of the Company are located as follows:
December 31, 2021 December 31, 2020
United States
Canada
Europe
Asia/Pacific
Customer A
Customer B
Customer C
A summary of sales to major customers that exceeded 10% of total sales during each period are as follows:
Year ended December 31,
2021
2020
$
$
$
$
2,425
-
37
18
2,480
1,365
468
-
1,833
$
$
$
$
2,654
30
24
23
2,731
1,097
510
293
1,900
19. Financial risk management:
The Company has exposure to the following risks from its use of financial instruments: credit risk, market
risk, liquidity risk, and capital risk. Management, the Board of Directors, and the Audit Committee monitor
risk management activities and review the adequacy of such activities. This note presents information about
the Company’s exposure to each of the risks as well as the objectives, policies and processes for measuring
and managing those risks.
The Company’s risk management policies are established to identify and analyze the risks faced by the
Company, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk
management policies and systems are reviewed regularly to reflect changes in market conditions and the
Company’s activities. The Company, through its training and management standards and procedures, aims
to develop a disciplined and constructive control environment in which all employees understand their
roles and obligations.
a. Credit risk
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial
instrument fails to meet its contractual obligations. Such risks arise principally from certain financial
assets held by the Company consisting of outstanding trade receivables and investment securities.
The Company’s exposure to credit risk is influenced mainly by the individual characteristics of each
customer. However, management also considers the demographics of the Company’s customer base,
including the default risk of the industry and country in which customers operate, as these factors may
have an influence on credit risk.
Approximately 32 percent of the Company’s revenue is attributable to transactions with two key
customers (year ended December 31, 2020 – 40 percent of the revenue was attributable to three
key customers), approximately 21 percent of the Company’s trade receivables at year end are
attributable to customers located in Asia/Pacific (December 31, 2020 – approximately 22 percent), and
approximately 50 percent of the Company’s trade receivables at year end are attributable to customers
located in Europe (December 31, 2020 – approximately 69 percent).
The Company has established a credit policy under which each new customer is analyzed individually
for creditworthiness before the Company’s standard payment and delivery terms and conditions are
offered.
2021 Annual Report | Consolidated Financial Statements
55
A significant portion of the Company’s customers have transacted with the Company in the past or are
reputable large Companies and losses have occurred infrequently.
The maximum exposure to credit risk of the Company at period end is the carrying value of these
financial assets.
i.
Trade receivables
Expected credit losses are made on a customer-by-customer basis. All write downs against
receivables are recorded within sales, general and administrative expense in the statement of
operations. The Company is exposed to credit-related losses on sales to customers outside North
America due to potentially higher risks of collectability.
Amounts receivable as of December 31, 2021 and 2020, consist of:
Trade receivables
Other miscellaneous receivables
Trade receivables by geography consist of:
United States
Europe
Asia/Pacific
An aging of the Company’s trade receivables are as follows:
Current
31-60 days
61-90 days
Over 91 days
December 31, December 31,
2020
2021
$
398
516
$
351
228
$
914
$
579
December 31, December 31,
2020
2021
$
117
198
83
$
33
242
76
$
398
$
351
December 31, December 31,
2020
2021
$
362
36
-
-
$
270
22
21
38
$
398
$
351
The balance of the past due amounts relates to reoccurring customers and are considered
collectible.
ii. Cash
The Company manages its credit risk surrounding cash by dealing solely with what management
believes to be reputable banks and financial institutions and limiting the allocation of excess
funds into financial instruments that management believes to be highly liquid, low risk
investments. The balance at December 31, 2021, is held in unrestricted cash at banks within the
United States, Canada, Europe, Asia, and Australia to facilitate the payment of operations in those
jurisdictions.
b. Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates,
will affect the Company’s income or the value of its holding of financial instruments.
i.
Foreign exchange risk
The Company operates internationally and is exposed to foreign exchange risk from various
currencies, primarily the Canadian dollar, Euro, British pound, Indonesian rupiah, Czech Republic
2021 Annual Report | Consolidated Financial Statements
56
koruna, Malaysian ringgit and Australian dollar. Foreign exchange risk arises from sales and
purchase transactions as well as recognized financial assets and liabilities that are denominated
in a currency other than the United States dollar, which is the functional currency of the Company
and most its subsidiaries.
The Company’s primary objective in managing its foreign exchange risk is to preserve sales values
and cash flows and reduce variations in performance. Although management monitors exposure
to such fluctuations, it does not employ any external hedging strategies to counteract the foreign
currency fluctuations.
The balances in foreign currencies at December 31, 2021, are as follows:
(in USD)
Cash
Trade receivables
Accounts payable and
accrued liabilities
Project financing
Government loans
Australian
Dollar
Canadian
Dollar
Euro
British
Pound
Indonesian
Rupiah
Czech
Republic
Koruna
-
$
38
2
$
8
$
19
10
-
$
93
10
$
-
6
$
41
(2)
-
-
(595)
(188)
(332)
(29)
-
-
(16)
-
-
(161)
-
-
(151)
-
-
$
36
$
(1,105)
$
-
$
77
$
(151)
$
(104)
The balances in foreign currencies at December 31, 2020, are as follows:
(in USD)
Cash
Trade receivables
Accounts payable and
accrued liabilities
Project financing
Government loans
Australian
Dollar
Canadian
Dollar
Euro
British
Pound
Indonesian
Rupiah
Czech
Republic
Koruna
$
-
-
$
1,035
11
$
23
47
$
-
12
$
-
77
$
37
30
(5)
-
-
(407)
(188)
(312)
(29)
-
-
-
-
-
(162)
-
-
(121)
-
-
$
(5)
$
139
$
41
$
77
$
(150)
$
(54)
Based on the net exposures at December 31, 2021 and 2020, and if all other variables remain
constant, a 10% depreciation or appreciation of the United States dollar against the following
currencies would result in an increase / (decrease) in net earnings by the amounts shown below:
December 31, 2021
United States dollar:
Depreciates 10%
Appreciates 10%
December 31, 2020
United States dollar:
Depreciates 10%
Appreciates 10%
ii.
Interest rate risk
Australian
Dollar
Canadian
Dollar
Euro
British
Pound
Indonesian
Rupiah
Czech
Republic
Koruna
$
(4)
4
$
111
(111)
-
$
-
$
(8)
8
$
15
(15)
$
10
(10)
Australian
Dollar
Canadian
Dollar
Euro
British
Pound
Indonesian
Rupiah
Czech
Republic
Koruna
$
-
-
$
(14)
14
$
(4)
4
$
(8)
8
$
15
(15)
$
5
(5)
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in market interest rates.
Financial assets and financial liabilities with variable interest rates expose the Company to cash flow
interest rate risk. The Company does not have any debt instruments outstanding with variable interest
rates at December 31, 2021, or December 31, 2020.
2021 Annual Report | Consolidated Financial Statements
57
Financial liabilities that bear interest at fixed rates are subject to fair value interest rate risk. No
currency hedging relationships have been established for the related monthly interest and principal
payments.
The Company manages its interest rate risk by minimizing financing costs on its borrowings and
maximizing interest income earned on excess funds while maintaining the liquidity necessary to
conduct operations on a day-to-day basis.
c.
Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its obligations as they become due.
The Company’s approach to managing capital is to ensure, as far as possible, that it will have sufficient
liquidity to meets its obligations.
The Company manages its liquidity risk by evaluating working capital availability and forecasting cash
flows from operations and anticipated investing and financing activities. At December 31, 2021, the
Company has a cash balance of $188 (December 31, 2020 – $1,778) and working capital of negative
$3,388 (December 31, 2020 – negative $1,816).
The following are the contractual maturities of the undiscounted cash flows of financial liabilities as of
December 31, 2021:
Accounts payable
and accrued liabilities
Project financing
Government loans
Lease obligations
Payment due:
In less than 3
months
Between
3 months and 6
months
Between
6 months and 1
year
Between
1 year and 2
years
Between
2 years and 5
years
$
3,498
-
2
75
$
-
-
2
80
$
158
-
4
126
$
-
188
138
170
$
-
-
490
125
$
3,575
$
82
$
288
$
496
$
615
The following are the contractual maturities of the undiscounted cash flows of financial liabilities as of
December 31, 2020:
Payment due:
In less than 3
months
Between
3 months and 6
months
Between
6 months and 1
year
Between
1 year and 2
years
Between
2 years and 5
years
$
2,910
-
-
76
$
33
-
-
80
$
159
-
4
160
-
$
188
9
283
$
-
-
628
256
$
2,986
$
113
$
323
$
480
$
884
Accounts payable
and accrued liabilities
Project financing
Government loans
Lease obligations
d. Capital risk
The Company’s objectives when managing its capital risk is to safeguard its assets, while at the same time
maintaining investor, creditor, and market confidence, and to sustain future development of the business
and ultimately protect shareholder value. The Company manages its risks and exposures by implementing
the strategies below.
The Company includes shareholders’ deficiency, long-term portion of project financing, long-term
government loans, and long-term portion of lease obligations in the definition of capital. Total capital at
December 31, 2021, was positive $1,807 (December 31, 2020 – positive $2,655). To maintain or adjust the
capital structure, the Company may issue new shares, issue new debt with different characteristics, acquire
or dispose of assets, or adjust the amount of cash and short-term investment balances held.
The Company has established a budgeting and planning process with a focus on cash, working capital,
and operational expenditures and continuously assesses its capital structure considering current economic
2021 Annual Report | Consolidated Financial Statements
58
conditions and changes in the Company’s short-term and long-term plans. Neither the Company nor any
of its subsidiaries are subject to externally imposed capital requirements.
20. Fair values:
Set out below is a comparison by class of the carrying amounts and fair value of the Company’s financial
instruments that are carried in the Consolidated Balance Sheet:
December 31, 2021
Carrying
Amount
Fair
Value
December 31, 2020
Carrying
Amount
Fair
Value
Financial assets
Cash
Amounts receivable
Investments
Financial liabilities
Accounts payable and accrued liabilities
Project financing
Government loans
$
$
$
$
188
914
1,062
2,164
188
914
1,062
2,164
1,778
579
-
2,357
1,778
579
-
2,357
$
$
$
$
3,656
188
486
4,330
$
3,656
188
486
4,330
$
3,102
188
464
3,754
$
3,102
188
464
3,754
$
The fair values of the financial assets and liabilities are determined at the amount at which the instrument
could be exchanged in a current transaction between willing parties, other than in a forced or liquidation
sale.
The following methods and assumptions were used to estimate the fair values:
•
•
•
Cash, amounts receivable, accounts payable and accrued liabilities and provisions approximate their
carrying amounts largely due to the short-term maturities of these instruments.
Carrying amount of project financing and government loans approximates fair value due to pre-vailing
interest rates and the risk characteristics of the instrument.
The fair value of the warrants is estimated using the Black-Scholes option pricing model incorporating
various inputs including the underlying price volatility and discount rate.
21. Key management personnel and director compensation:
The Company’s compensation program specifically provides for total compensation for executive officers,
which is a combination of base salary, performance-based incentives and benefit programs that reflect
aggregated competitive pay considering business achievement, fulfillment of individual objectives and
overall job performance. Executive officers participate in the Company’s omnibus plan (see Note 15(f )).
The compensation of non-employee directors consists of a cash component and a share component.
Directors participate in the Company’s omnibus plan (see Note 15(f )).
The following summarizes key management personnel and directors’ compensation for the years ended
December 31, 2021 and 2020:
Year ended December 31,
Compensation and benefits
Share-based compensation
2021
2020
$
$
$
$
1,307
131
1,438
1,062
79
1,141
2021 Annual Report | Consolidated Financial Statements
59
The following summarizes key management personnel and directors share ownership of the Company as of
December 31, 2021, and 2020:
December 31,
Number of Class A Common shares held
Percentage of total Class A Common shares issued
2021
6,496,696
22.09%
2020
6,496,696
25.78%
22. Subsequent event:
In February 2022, the Company issued 2,537,700 Class A common shares (Shares) under an issuer private
placement at a price of C$0.51 per Share raising aggregate gross proceeds of C$1,294. In addition, the
Company issued 43,500 Class A common share purchase warrants with an exercise price of US$0.54 expiring
on February 10, 2024.
In March 2022, the Company issued 1,470,588 Class A common shares (Shares) under an issuer private
placement at a price of C$0.51 per Share raising aggregate gross proceeds of C$750. In addition, the
Company issued 131,735 Class A common share purchase warrants with an exercise price of US$0.54
expiring on March 18, 2024.
Intermap Technologies
8310 South Valley Highway, Suite 240
Englewood, Colorado 80112-5809
United States
Phone: +1 (303) 708-0955
+1 (303) 708-0952
Fax:
info@intermap.com
E-mail:
www.intermap.com
Web:
Denver · Calgary · Jakarta · Prague